Barclays Plc · LSE:BARC
Barclays — Merger or Acquisition (December 2012)
33 slides from Barclays's merger presentation, December 2012
Slide 1: Barclays Africa transaction
Barclays Africa transaction Investor presentation December 2012 1
Slide 2: Agenda
Agenda • Highlights • Strategic rationale • Transaction details • Impact on Absa • Absa current trading • Summary 2
Slide 3: Transaction highlights
Transaction highlights • Absa Group combines with Barclays African operations • Accelerates One Bank in Africa strategy • Improves Absa’s earnings growth prospects, returns and diversity • Absa acquires Barclays Africa Limited for 129.5m Absa shares, representing a value of R18.3bn − Barclays stake
Slide 4: A compelling strategic rationale
A compelling strategic rationale • A key step in realising One Bank in Africa ambitions • Legal structure follows functional integration • Diversifies earnings, significantly increasing rest of Africa contribution • Enhances Absa’s earnings growth prospects Become Africa’s “Go-To” bank 4
Slide 5: Banking revenue pools expected to grow faster than GDP
Banking revenue pools expected to grow faster than GDP GDP by region ($bn) Banking revenue pools ($bn) 7% 11% cagr cagr 2500 200 2150 170 2000 160 1500 1500 120 100 1050 1000 80 60 500 40 0 0 2010 2015 2020 2010 2015 2020 Rest of Africa SADC SA Rest of Africa SADC SA Source: Bankscope, Central bank
Slide 6: Africa is a strong contributor to Barclays
Africa is a strong contributor to Barclays Africa Contribution to Barclays PBT PBT (2011, £bn) contribution Barclays PLC 1.3 5.9 • Second largest non-UK PBT contributor 21% to Barclays, after the US Retail and 0.9 3.3 27% • 16% of RBB advances and deposits Business Bank 0.2 1.2 18% • 16% of Barclayc
Slide 7: Accelerating One Bank in Africa strategy
Accelerating One Bank in Africa strategy • Corporate and Investment Banking − Single integrated Markets business − Substantial Corporate opportunity • Bancassurance − Rest of Africa already profitable in 1H12 − Enter East Africa in 2Q13 • Retail and Business Banking − Innovation/digital collaboratio
Slide 8: A unique opportunity
A unique opportunity • Barclays Africa is well diversified by geography and activity • A leading franchise – top 4 by revenue in 7 countries • Produces attractive returns • Embedded in local communities • Has a strong balance sheet • Same policies and procedures, risk governance as Absa • Limited in
Slide 9: A leading African franchise
A leading African franchise Ghana Kenya • Total assets: R8.3bn • Total assets: R17.6bn • CAR: 17.3% 4 • CAR: 22.0% 3 • Profit before tax: R257m • Profit before tax: R596m • Barclays presence since 1917 • Listed, market cap: R8.2bn * • Barclays presence since 1925 Uganda • Total assets: R3.8bn Tanzan
Slide 10: Barclays Africa – key numbers (1H12)
Barclays Africa – key numbers (1H12) • Revenue R7.75bn (annualised) • Attributable profit after tax R1.8bn (annualised) • RoE 22.3% • Assets R81.6bn • Loans R38.3bn and deposits R60.5bn • 409 branches and 845 ATMs • Approximately 9,131 employees • 2.2m retail customers Note: The financial numbers pr
Slide 11: A well diversified portfolio (1H12)
A well diversified portfolio (1H12) Loans by country Deposits by country Profit after tax Other Botswana Other Botswana Other Botswana 18% 17% 18% 17% 23% 17% Ghana Ghana Mauritius 8% Mauritius 10% 14% Domestic Mauritius Ghana 16% Domestic 24% Kenya 13% Kenya Mauritius 25% Mauritius 20% Kenya Offsho
Slide 12: Attractive returns
Attractive returns RoRWA (2011) Profitability * % 25 % % 3.2 Botswana 9.7 2.5 2.8 2.5 2.7 Ghana 9.0 20 2.4 Seychelles 7.1 2.0 15 Kenya 7.1 1.6 Uganda 3.0 10 1.2 Zambia 2.9 1.1 0.8 Mauritius 2.5 5 0.4 Tanzania 0.1 13.6 22.5 20.3 22.3 0 0.0 0 5 10 2009 2010 2011 1H12 RoE RoA (RHS) Source: Barclays Not
Slide 13: Attractive risk-adjusted margins
Attractive risk-adjusted margins Net interest margins Loan loss ratio * % Zambia 3.5 Uganda 3.0 2.9 Tanzania Seychelles 2.5 2.4 Mauritius 2011 1H12 Offshore 2.0 Mauritius Domestic 1.5 Kenya 1.2 Ghana 1.0 0.8 Botswana 0.5 Barclays Africa 0.0 0% 5% 10% 15% 2009 2010 2011 1H12 Source: published financi
Slide 14: A strong balance sheet
A strong balance sheet Capital ratios (1H12) Loan to deposit ratio % % 30 68 66 65 25 64 63 20 62 62 15 60 10 58 5 56 55 0 54 Mauritius Ghana Uganda Botswana Zambia Tanzania Seychelles Kenya 52 50 Tier 1 Total capital Local regulatory tier 1 2009 2010 2011 1H12 Source: Published financials; regulato
Slide 15: Established Executive Committee team
Established Executive Committee team Chief Executive Barclays Africa, Chief Risk Chief of Staff MD Mauritius Africa Chief Officer Musa Motloung Ravin Dajee Strategy Officer Robert Sack Kennedy Bungane [Exp: 7/<1/15] [Exp: 20/5/20] [Exp: 24/22/16] [Exp: 20/<1/20] Retail Director General Counsel MD Za
Slide 16: A leading combined distribution network
A leading combined distribution network Number of branches in Africa (2011) 1400 1200 1000 800 600 400 200 0 Absa / Standard Ecobank FirstRand UBA Nedbank Standard Barclays Bank Chartered Africa Source: Company reports 16
Slide 17: Transaction details
Transaction details • Category 2, related party transaction • Effected by: – Transfer Barclays stakes in Botswana, Kenya, Ghana, Mauritius, Zambia, Uganda, Tanzania, Seychelles and Barclays Africa Regional Office to Barclays Africa Limited – Absa acquires Barclays Africa Limited for R18.3bn – Absa i
Slide 18: Proposed structure post transaction
Proposed structure post transaction Barclays Other public shareholders 62.3% 37.7% Barclays Africa Group 100% South Africa 100% Barclays Africa Ltd Botswana 67.8% Mozambique 95.8% (listed) Ghana 100% Tanzania 55% Kenya 68.5% (listed) Mauritius 100% Seychelles 99.8% Tanzania 100% Uganda 100% Zambia 1
Slide 19: Several conditions precedent
Several conditions precedent • Regulatory approvals for the transfer of the target companies • Absa Group minority shareholders approve the transaction (50% + 1 vote) • Absa Group shareholders, including Barclays, approve to allot and issue shares to Barclays (75%) • Absa Group Shareholders, includi
Slide 20: Key dates
Key dates 2012 6 December • Transaction announcement 14 December target • Circular posted 2013 12 February • FY12 results 25 February • Shareholder meeting First half • Aim to complete transaction 20
Slide 21: Impact on Absa
Impact on Absa Pro forma 1H12 impact: Rest of Africa contribution to earnings % 18 • Headline EPS -1.1% 15 15 • Earnings accretive by 2013 • Rest of Africa 15% of earnings 12 11 • NAV per share -4.1% 9 • Tier 1 ratio –c.20bp; total –c.45bp 6 5 4 • Impact of predecessor accounting 3 • Loan to deposit
Slide 22: Absa current trading
Absa current trading • FY12 trends similar to 1H12 • Improved FY12 cost to income ratio (YoY) • Low to mid-single digit loan growth • FY12 credit loss ratio around 1.5% • Edcon acquisition effective 1 November 2012 • Strong capital position – 3Q12 tier 1 ratio 13.0%* Note: * Excludes unappropriated
Slide 23: Summary
Summary • An opportunity to create a leading listed sub-Saharan African financial services group • Compelling strategic rationale enhanced by a supportive macro environment • Good for shareholders, customers and clients, colleagues and communities in which we operate Become Africa’s “Go-To” bank 23
Slide 24: Questions and answers
Questions and answers Seychelles Mauritius 24
Slide 25: Snapshot of Barclays African operations in scope
Snapshot of Barclays African operations in scope Rm 2009 2010 2011 1H12 Balance Sheet Assets 76316 70451 82426 81636 Liabilities 68779 61686 72420 71706 Total equity 7537 8765 10005 9931 Income Statement Revenue 8113 8219 6845 3874 Operating costs * 5137 4392 3792 2081 Profit after tax (pre minoriti
Slide 26: Botswana
Botswana BWP’m 2009 2010 2011 1H12 Total revenue 1,347 1,355 1,344 670 Customer loan impairments 204 162 116 67 Operating expenses 538 535 584 316 PAT 455 573 539 235 Contribution to Barclays Africa 41.3% 23.1% 25.9% 20.5% Portfolio PAT Total loans 5,829 5,572 6,092 6,081 Total assets 11,798 11,669
Slide 27: Ghana
Ghana GHS’m 2009 2010 2011 1H12 Total revenue 188 242 227 133 Customer loan impairments 61 21 6 8 Operating expenses 152 115 106 64 PAT (20) 59 83 56 Contribution to Barclays Africa (8.9)% 11.3% 16.7% 20.2% Portfolio PAT Total loans 514 436 589 714 Total assets 1,464 1,637 1,907 1,991 Total deposits
Slide 28: Kenya
Kenya KHS’m 2009 2010 2011 1H12 Total revenue 23,397 26,025 26,339 13,696 Customer loan impairments 513 1,200 729 459 Operating expenses 13,882 14,049 13,597 6,924 PAT 6,091 10,599 8,073 4,267 Contribution to Barclays Africa 50.9% 36.7% 32.8% 32.9% Portfolio PAT Total loans 93,543 87,147 99,072 101,
Slide 29: Mauritius
Mauritius MUR’m 2009 2010 2011 1H12 Total revenue 3,604 4,781 2,979 1,555 Customer loan impairments 568 603 56 194 Operating expenses 1,853 1,791 1,575 818 PAT 1,085 2,378 1,180 545 Contribution to Barclays Africa 22.0% 21.2% 13.4% 12.0% Portfolio PAT Total loans 49,514 43,829 45,876 45,845 Total as
Slide 30: Seychelles
Seychelles SCR’m 2009 2010 2011 1H12 Total revenue 324 323 373 220 Customer loan impairments 31 (18) 10 (0) Operating expenses 206 161 159 78 PAT 69 132 154 83 Contribution to Barclays Africa 3.7% 2.8% 4.0% 3.8% Portfolio PAT Total loans 1,339 1,154 1,081 1,083 Total assets 5,103 5,786 6,458 6,885 T
Slide 31: Tanzania
Tanzania TZS’m 2009 2010 2011 1H12 Total revenue 44,271 52,407 50,263 25,700 Customer loan impairments 12,752 11,968 (298) 3,071 Operating expenses 35,454 45,322 48,953 28,295 PAT (4,220) (3,428) 170 (5,666) Contribution to Barclays Africa (2.1)% (0.7)% 0.0% (2.3)% Portfolio PAT Total loans 232,266
Slide 32: Uganda
Uganda UGX’m 2009 2010 2011 1H12 Total revenue 115,890 129,664 145,013 78,480 Customer loan impairments 8,402 21,088 14,218 3,728 Operating expenses 117,758 97,814 105,598 43,417 PAT (4,687) 9,729 21,190 19,746 Contribution to Barclays Africa (1.5)% 1.2% 3.1% 5.2% Portfolio PAT Total loans 486,036 4
Slide 33: Zambia
Zambia ZMK’m 2009 2010 2011 1H12 Total revenue 643,800 608,531 522,725 280,339 Customer loan impairments 299,685 63,384 17,681 997 Operating expenses 408,544 464,838 358,501 168,777 PAT (42,944) 73,813 60,884 62,812 Contribution to Barclays Africa (5.5)% 4.2% 4.2% 7.8% Portfolio PAT Total loans 1,97