Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — FY2019 Earnings Presentation
35 slides from Stanbic's earnings presentation, 2020
Slide 1: Financial Results Presentation
STANBIC HOLDINGS PLC FINANCIAL RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2019
Slide 2: Contents
Contents Section Page 1. Welcome and remarks 3 2. Operating environment 4 3. Our strategy 6 5. Financial outcome ❑ Drivers of performance 12 ❑ Corporate and Investment Banking (CIB) 23 ❑ Personal and Business Banking (PBB) 26 ❑ Stanbic Insurance Agency Limited (SIAL) 29 ❑ SBG Securities (SBGS) 32 Q&
Slide 3: Welcome and remarks
© Welcome and remarks
Slide 4: Operating environment
Operating environment Charles Mudiwa Chief Executive, Stanbic Bank
Slide 5: Operating environment in 2019
Operating environment in 2019 1 2 3 4 Macro-economic environment Regulatory environment Market threats Market opportunities Inflation ❑ Interest rate caps ❑ Cyber security risk ❑ Technological innovations ❑ Dec 2019 5.8% vs. Dec 2018 5.7% ❑ IFRS 16 on leases ❑ Increased competition from ❑ Infrastruc
Slide 6: Our response
Our response Charles Mudiwa Chief Executive, Stanbic Bank
Slide 7: Recap of our strategy
Recap of our strategy Our Purpose the reason we exist Kenya is our home, we drive her growth Our Vision To be a leading financial services organization in Kenya, delivering exceptional what we aspire to be client experiences and superior value In executing our strategy our key focus areas are We mea
Slide 8: We continue to live our purpose by driving Kenya's growth through various initiatives
We continue to live our purpose by driving Kenya’s growth through various initiatives Manufacturing Affordable Housing 21% of our total loan book Invested in relates to financing to Kenya Mortgage manufacturing sector Refinance Company (KMRC) Food Security Affordable Healthcare 10% of our total loan
Slide 9: Spurring the growth of Kenya's financial markets
Spurring the growth of Kenya’s financial markets Trusted Financial Partner Transaction advisory Lead arranger – Green Bond Lead transaction advisor and placement agent Closed significant Investment banking Lead arranger and placement agent for one of the biggest equities transaction in deals to supp
Slide 10: Driving Kenya's growth through financial inclusion, job creation and enterprise development
Driving Kenya’s growth through financial inclusion, job creation and enterprise development Financial Fitness Supporting M-kopa Academies upcoming artistes UBER External ❑ Stanbic continues to Completed financial ❑ 107 artistes currently ❑ 510 drivers supported to ❑ Interacted with over partner with
Slide 11: Financial outcome
Financial outcome Total revenue Customer loans 12% 4% ❑ The Group (Kenya Bank, South Sudan branch, SBG 2019: KES 24.8b 2019: KES 152.8b up up Securities and Stanbic Insurance Agency Limited) reported 2018: KES 22.1b 2018: KES 146.6b a profit after tax of KES 6.4b ◼ Total revenue grew by 12% driven b
Slide 12: Drivers of performance
Drivers of performance Abraham Ongenge Chief Finance Officer
Slide 13: Summary income statement
Summary income statement Dec-2019 Dec-2018 change KES m KES m % Net interest income 13 348 12 130 10 Non-interest revenue 11 433 9 965 15 Total income 24 781 22 095 12 Operating expenses (13 920) (11 082) (26) Pre-provision profit 10 861 11 013 (1) Credit impairment charges (3 151) (2 064) (53) Tax
Slide 14: Balance sheet growth especially in PBB drives increase in net interest income
Balance sheet growth especially in PBB drives increase in net interest income ❑ Average balance sheet growth in all business units contributed to increased NII ❑ Personal and Business Banking registered improved margins despite rate cuts during the year. This is largely on account of decrease in cos
Slide 15: Non-interest revenue
Non-interest revenue 14 000 KES millions Net fees and commission income 12 000 Increase in net fees and commission income explained by: 10 000 ❑ Key investment banking deals closed within the year 8 000 ❑ Continued growth in electronic banking revenues 6 000 Trading and other income ❑ Growth in mark
Slide 16: Credit impairment and operating expenses
Credit impairment and operating expenses KES millions KES millions 5 000 4 000 Credit impairments 16 000 57.0% 56.2% 3 000 56.0% 14 000 2 000 55.0% 1 000 12 000 - 54.0% Credit imp General debt Specific debt 10 000 Other operating (1 000) 53.0% provision provision expenses (2 000) 8 000 52.0% Staff c
Slide 17: Summarised group balance sheet
Summarised group balance sheet Dec-2019 Dec-2018 Change KES millions KES millions % Assets Financial investments 70 078 72 260 (3) Loans and advances to banks 38 378 28 381 35 Loans and advances to customers 152 817 146 604 4 Other assets 28 303 30 491 (7) Property and equipment 2 302 2 234 3 Right
Slide 18: Implementation of IFRS 16
Implementation of IFRS 16 Right of use assets ❑ A single lessee model where a right of use asset together with a liability for future payments is to be recognized for all leases with a term of more than 12months, unless the underlying asset is of low value Stanbic perspective ❑ The group leases prop
Slide 19: Customer loans and advances
Customer loans and advances KES millions Loans and advances by business unit 154 000 152 817 152 000 Dec 2019 Dec 2018 150 000 148 000 CIB 146 604 146 000 46% PBB CIB PBB 54% 49% 51% 144 000 142 000 Dec 2019 Dec 2018 Dec 2019 Loans and advances by product Dec 2018 Loans and advances by product Home
Slide 20: Customer loans and advances: Non performing loans (NPLs)
Customer loans and advances: Non performing loans (NPLs) 18 000 36.8% 16 000 36.7% NPLs by business unit 36.6% 14 000 36.4% Dec 2019 Dec 2018 12 000 Loan loss provision 10 000 36.2% Discounted value of PBB PBB 8 000 35.9% 36.0% security 31% 29% 6 000 Coverage ratio CIB CIB 35.8% 69% 4 000 71% 35.6%
Slide 21: Customer deposits
Customer deposits ◼ Customer deposits grew by 1% year on year with core KES millions accounts accounting for 82% of total deposits 194 500 194 222 194 000 Customer deposits by business unit 193 500 Dec 2019 Dec 2018 193 000 192 500 192 000 191 585 191 500 PBB CIB CIB 47% 191 000 PBB 48% 53% 190 500
Slide 22: Funding, liquidity and capital
Funding, liquidity and capital 120% 100% Capital adequacy ratio (Bank only) 16% 15% 7% 7% 80% 2% 20.0% 3% 18.3% 10% 10% 17.4% 18.0% 60% 16.0% 15.2% 14.5% 14.6% 40% 14.5% 14.0% 64% 66% 20% 12.0% 10.5% 10.0% 10.5% 0% Dec-19 Dec-18 8.0% Customer deposits Deposits from Banks Borrowings 6.0% Other liabil
Slide 23: Corporate and Investment Banking (CIB)
Corporate and Investment Banking (CIB) Anton Marais Executive, Corporate & Investment Banking
Slide 24: CIB summary performance
CIB summary performance Dec-2019 Dec-2018 change ❑ Higher non interest revenue due to fees from key KES m KES m % deals in Investment Banking, increased client flow Net interest income 6 433 6 412 0 and gains from disposal of financial investments Non-interest revenue 8 789 7 524 17 ❑ Credit loss ra
Slide 25: CIB strategic priorities
CIB strategic priorities We aspire to be the undisputed We want to deliver value to our We want to partner with our clients financial services provider of clients through our deep sector to unlock their dreams choice expertise by focusing on: Client centricity We want to do valuable things for our c
Slide 26: Personal Business Banking (PBB)
Personal Business Banking (PBB) Maurice Matumo Executive, Personal & Business Banking
Slide 27: PBB summary performance
PBB summary performance Dec-2019 Dec-2018 change ❑ Strong balance sheet growth on our focus KES m KES m % segments driven by acquisition of new to bank Net interest income 6 915 5 718 21 customers Non-interest revenue 2 644 2 441 8 Total income 9 559 8 159 17 ❑ Increase in net interest income explai
Slide 28: PBB strategic priorities
PBB strategic priorities ❑ Scale up customer acquisition through targeted ecosystems ❑ Delta’s in Enterprise (SME), Agriculture and Public Sector ❑ Enabled through digital transformation ❑ Enhanced risk awareness
Slide 29: Stanbic Insurance Agency
Stanbic Insurance Agency Charles Ochieng Executive, Stanbic Insurance Agency
Slide 30: Stanbic Insurance Agency summary performance
Stanbic Insurance Agency summary performance Dec-2019 Dec-2018 change KES m KES m % Net interest income 9 9 5 This performance reflects: Fees and commission 277 249 11 ❑ Increased revenue from embedded products in line with the bank’s asset book growth Total income 286 258 11 ❑ Increased revenue fro
Slide 31: Stanbic Insurance Agency strategic priorities
Stanbic Insurance Agency strategic priorities ❑ Deepening insurance penetration on the Bank’s customer base ❑ Enhance our business relationships with insurance companies and strategic partners ❑ Investing in digital capabilities to offer relevant solutions to customers conveniently ❑ Monitoring the
Slide 32: SBG Securities (SBGS)
SBG Securities (SBGS) Bethuel Karanja Executive Director, SBG Securities
Slide 33: SBGS summary performance
SBGS summary performance Dec-2019 Dec-2018 change KES m KES m % Brokerage commission 253 260 (3) ❑ 18% year-on-year revenue growth driven by: Other revenue 162 93 74 ◼ An increase in equities market share to Total income 415 353 18 17.4% compared to 16.7% in 2018, which largely offset the 12.4% Tota
Slide 34: SBGS' achievements and strategic priorities
SBGS’ achievements and strategic priorities Ranked # 1 broker across East Africa by Accelerating digital innovation and uptake of digital products value of equities traded in 2019 Transactions originated #1 #1 #1 from M-Shares & iTrader 70% 69% 65% 60% 61% 60% 55% 50% 2017 2018 2019 Leadership in ca
Slide 35: Thank You
THANK YOU