Ncba Group Plc · NSEKE:NCBA
Ncba — Investor Presentation (April 2023)
43 slides from Ncba's investor presentation, April 2023
Slide 1: FY 2022 Investor Briefing
FY 2022 Investor Briefing April 2023 ncbagroup.com Go for it
Slide 2: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES & GUIDANCE <
Slide 3: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES & GUIDANCE <
Slide 4: Our Group Structure
WHO WE ARE Our Group Structure NCBA BANK KENYA PLC NCBA BANK RWANDA PLC BANKING NCBA BANK UGANDA LTD SUBSIDIARIES NCBA BANK TANZANIA LTD NCBA DIGITAL BANKING GROUP PLC NCBA LEASING LLP NON NCBA INVESTMENT BANK LTD BANKING SUBSIDIARIES NCBA INSURANCE AGENCY NIC PROPERTIES LTD 4
Slide 5: Our Purpose and Values
WHO WE ARE Our Purpose and Values OUR OUR OUR PURPOSE VALUES CUSTOMER Welcome to the PROMISE bank that says go At NCBA, our customers for it. are at the heart of everything we do – we are To be the DRIVEN driven by our promise to Welcome to the offer exceptional Financial Services OPEN innovative pr
Slide 6: What Makes Us Different
WHO WE ARE What Makes Us Different Our customers benefit from the Group’s commitment to customer service excellence, a superior banking platform and our broad array of products. •Customer Centric Culture •Integrated Core Banking Platform •Strong Relationship Management •Digital Leadership •Innovativ
Slide 7: Our Regional Footprint
WHO WE ARE Our Regional Footprint KEY GROUP HIGHLIGHTS CUSTOMERS UGANDA > 60M Branches 4 Customers 9M STAFF 3,022 BRANCHES IVORY COAST KENYA Purely Digital Customers 4.3M Branches 85 103 Customers 34M ATMs TANZANIA RWANDA Branches 9 93 Branches 5 Customers 6.8M CASH DEPOSIT MACHINES Customers 3.4M 8
Slide 8: 2022 Awards & Accolades
WHO WE ARE 2022 Awards & Accolades • 3rd Best in Customer Experience (Tier 1) - Kenya Bankers Association • Among Top 10 Most Valuable Brands in Kenya - Brand Finance • Best Bank in Kenya 2022 - Global Finance magazine • Best Bank in Kenya 2022 - Abojani Investments • One of Kenya's Top 5 best workp
Slide 9: We are led by an exceptional team which has ensured we deliver on post-merger promises
WHO WE ARE We are led by an exceptional team which has ensured we deliver on post-merger promises and has demonstrated resilience in managing our business 9
Slide 10: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES & GUIDANCE <
Slide 11: Global headwinds result in currency depreciation and increase in interest rates
OPERATING ENVIRONMENT Global headwinds result in currency depreciation and increase in interest rates GDP: Growth prospects continue to be Central Banks in tactical “wait and Regional currencies continue to roil under pressure undermined by debt sustainability see” - Tighter monetary policy stance -
Slide 12: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES & GUIDANCE <
Slide 13: Our Strategic Priorities: 2020 - 2024
STRATEGIC PRIORITIES Our 5 Strategic Priorities: 2020 - 2024 SCALE RETAIL Become a Distinguished Brand DEEPEN KnownLEADERSHIP For Customer IN Experience 1 BANKING: EXPAND DIGITAL CORPORATE BANKING DISTRIBUTION & ASSET FINANCE TRANSFORMATION Deepen Leadership 2 Scale Retail Banking: 3 4 Digital Expan
Slide 14: Strategic Roadmap
STRATEGIC PRIORITIES Strategic Roadmap Our phased approach allows us to invest in our growth agenda We are Here anchored on a solid organizational foundation. D C Implement 5 Strategic B Priorities Deploy the A Survive the Operating Unexpected Model of the Integrate our Future Endowments Turbulence
Slide 15: Become a distinguished brand known for customer experience
STRATEGIC PRIORITIES Positive performance across key financial metrics for the Group as we execute our 2020 – 2024 strategy 2020 2022 PBT 22.5 4.97 Become a Distinguished Brand CUSTOMER Known For Customer REGIONAL BUSINESS CONTROLS PERFORMANCE EXPERIENCE Experience ROAE 17.2% 6.6% Become a Scale Ret
Slide 16: Our diversified business model is demonstrating growth and resilience
BUSINESS MODEL Our diversified business model is demonstrating growth and resilience PBT (KES M) Core Banking Segment Digital Banking 2020 CAGR 2022 2020 CAGR 2022 >100% Kenya 3,097 18,112 Digital Business (KE) 2,277 +31% 3,919 <100% PBT Tanzania 84 (1,678) >100% Loop DFS (5) >100% 65 Uganda (372) 1
Slide 17: Our bigger and smarter retail network is delivering tangible balance sheet growth
STRATEGIC PRIORITIES Our bigger and smarter retail network is delivering tangible balance sheet growth KE Retail Banking Balance sheet (KES M) Branches 103 118 Growing (2022) (2023) 104 in 2021 Gross Loans Branch Network Counties Present 22 36 79,261 14% 90,233 (2022) (2023) 15 in 2021 33% 2021 2022
Slide 18: Our unique combination of heritage and innovation in Corporate Banking
STRATEGIC PRIORITIES Our unique combination of heritage and innovation in Corporate Banking has allowed us to continue to grow our business and market share Changes in Corporate customers # #Corporate Customers by Sector 3442 Better corporate Agribusiness customer growth +146 Manufacturing 10% out
Slide 19: Market leadership in Asset Finance and electric vehicle financing
STRATEGIC PRIORITIES We have maintained 60 years of market leadership in Asset Finance by relentlessly innovating; we are now leaning forward to fund the transportation models that address our pressing climate risk issues We have increased our distribution network 36% Market Share(33% 2021) Distribu
Slide 20: Unified mobile banking platform among the highest rated in Kenya
STRATEGIC PRIORITIES We consolidated our mobile banking applications into a unified platform and the NCBA Mobile Banking app is one of the highest rated in Kenya 2020 ∆% 2022 2022 Channel Enhancements (on Google 3.7 30% 4.8 App Play Store 3.4 Rating avg Peer rating) Silent OTP - removed reliance o
Slide 21: We pioneered digital mobile money solutions enhancing financial inclusion
STRATEGIC PRIORITIES We pioneered organized digital mobile money solutions and have enhanced financial inclusion for 60mn customers across Sub Saharan Africa… with Safaricom with Vodacom to launch the Launched LOOP a fully with Co-op, KCB & Our Contribution to for their launch of M-Pawa service in
Slide 22: Growing digital disbursements while diversifying across the region
STRATEGIC PRIORITIES …we are continuing to grow our digital disbursements while diversifying our business across the region Evolution of digital disbursements (KES B) Fuliza (KE) Mo-Kash (UG) 622 9 454 7 +35% 2021 2022 2021 2022 M-Pawa (TZ) 3 M-Shwari (KE) 729 1 72 87 542 2021 2022 2021 2022 Mo-Kash
Slide 23: Significant improvement in key customer experience metrics
STRATEGIC PRIORITIES Significant improvement in our key customer experience metrics as we make intentional investments to drive our customer promise - to Know You, Back You and Wow You 2020 ∆% 2022 Know Me >100% 80 40 • Intentional Customer Journey Design • Reinforce CX Leadership & Culture NPS Over
Slide 24: Strategic Thrusts: employee productivity and growth opportunities
STRATEGIC PRIORITIES While the Group has grown in size (3,022 staff as of FY 2022), we have maintained our market leadership in productivity and provided growth opportunities for our colleagues Building Interns Appointments Build Capacity Capacity: 2022 486 / promotions 30 converted into entry level
Slide 25: Building on our strengths towards a more sustainable future
STRATEGIC PRIORITIES We are building on our strengths & re-tooling our business to move towards a more sustainable future for ourselves and our communities Gender Equal opportunity partner 51% Female Staff Complement 2022 Tree planting & Environment seedling distribution 20,800 Trees planted in 2022
Slide 26: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES & GUIDANCE <
Slide 27: Our Group continues to demonstrate strong fundamentals with positive CAGR
NCBA GROUP FINANCIAL PERFORMANCE Our Group continues to demonstrate strong fundamentals with positive CAGR over the strategy period Amounts in KES B Income Statement Balance Sheet Total Income PBT Total Assets Customer Deposits Gross Loans +8% 308 CAGR 14.6% CAGR 113% CAGR 8.3% CAGR 9.2% CAGR 6.1% 5
Slide 28: Significant year on year profitability growth in Kenya, Uganda and Rwanda
NCBA GROUP FINANCIAL PERFORMANCE Significant year on year profitability growth in our Kenya, Uganda and Rwanda Businesses. Tanzania loss making position has been stabilized with expectation of positive turnaround in 2023 PBT (KES B) +37% +2x +10x +50% Uganda, 726 Tanzania, -1,565 Investment Bank, 16
Slide 29: Highly efficient business with a CIR of 42%
NCBA GROUP FINANCIAL PERFORMANCE Despite strategic investments and inflationary pressures, we continue to run a highly efficient business, with a CIR of 42% Amounts in KES M OPEX Increased by 19% in 2022…. …with better outcomes in a lower CIR Total Income OPEX Total spend KES 25 B 59,874 +19% Total
Slide 30: The growing lending book and asset allocation enhanced our top line
NCBA GROUP FINANCIAL PERFORMANCE The growing lending book and asset allocation enhanced our top line Amounts in KES M Amounts in KES B NII driven by asset allocation and capital efficiency… …in addition to healthy growth across our core assets HTM Bonds AFS Bonds Net Loans +12% -11% +13% 279 +14% 24
Slide 31: Market leading dollar book and currency risk management unlocked FX growth
NCBA GROUP FINANCIAL PERFORMANCE Our market leading dollar book & currency risk management unlocked strong FX growth in a volatile market environment Amounts in KES M Amounts in KES B NFI performed strongly driven by FX in addition to strong …boosted by our market leading FCY deposit book performanc
Slide 32: Sustained focus in managing credit risk
NCBA GROUP FINANCIAL PERFORMANCE Underpinning our profitability growth is a sustained focus in managing credit risk NCBA Group Gross Loans accelerated in 2022 (KES B) ….while our NPL ratio reduced to 12.7% from 15.6% Gross NPLs NPL Coverage NPL Ratio 15.6% 307 14.7% 12.7% 44 +8% 40 39 284 273 +4% 73
Slide 33: Our loan book is well diversified across product, currency and industry
NCBA GROUP FINANCIAL PERFORMANCE Our loan book is well diversified across product, currency and industry 2022 Loan Book Loan Book by Sector Loan Book by Segment Loan Book by Currency Manufacturing 21% Personal 21% Consumer Trade 19% 26% Transport and Comms 13% FCY 42% Construction & Real Estate 7% L
Slide 34: Increased footprint supported growth in deposit mobilization
NCBA GROUP FINANCIAL PERFORMANCE Our increased footprint supported growth in deposit mobilization while also enhancing our funding mix Amounts in KES B NCBA Group deposit mobilization ….while increasing our CASA ratio & FX mix CAGR 10% CAGR 8% 503 241 262 240 215 206 229 +7% 470 CASA Term +11% 2022
Slide 35: Investment in government securities balanced return and mark to market risk
NCBA GROUP FINANCIAL PERFORMANCE Our approach to investment in government securities effectively balanced return considerations while protecting the bank from mark to market losses Our asset mix is well diversified with Govt Securities making up …however our risk management has yielded comparatively
Slide 36: The Group remains effectively capitalized across our core markets
NCBA GROUP FINANCIAL PERFORMANCE The Group remains effectively capitalized across our core markets providing ample room to invest in growth Core Capital/RWA across our markets Total Capital/RWA across our markets 24.69% 25.16% 18.80% 18.80% 17.80% 13.16% 18.47% 17.74% 17.44% 14.69% 17.44% 17.22% 3.3
Slide 37: Strategy delivering desired return outcomes for a Tier 1 bank
NCBA GROUP FINANCIAL PERFORMANCE Our strategy is delivering the desired return outcomes for a Tier 1 bank and we are delivering consistent cash returns to our >27,000 shareholders with an average dividend payout of 50% in the last 3 years Profit After Tax (KES M) Cash Dividents (KES M) We are delive
Slide 38: Contents
CONTENTS WHO WE ARE < OPERATING ENVIRONMENT< UPDATE ON STRATEGIC PRIORITIES< FINANCIAL PERFORMANCE 2022 < 2023 PRIORITIES <
Slide 39: We have identified 5 key areas requiring greater attention in 2023
2023 PRIORITIES We have identified 5 key areas requiring greater attention in 2023 Thematic Area Objective Balance Sheet • Enhance the value generated from our substantial balance sheet Optimization Customer • Increase the number of customers we attract and retain across NCBA Growth Grow Shareholder
Slide 40: PG |
PG | 40
Slide 41: 2022 Statement of Profit & Loss
APPENDIX I 2022 Statement of Profit & Loss NCBA Bank Kenya NCBA Group Consolidated Amounts in KES Millions 2022 2021 ∆% 2022 2021 ∆% Interest Income 46,896 42,196 11% 52,404 46,514 13% Interest Expenses (19,469) (17,621) 10% (21,726) (19,477) 12% Net Interest Income 27,427 24,575 12% 30,678 27,037 1
Slide 42: 2022 Statement of Financial Position
APPENDIX II 2022 Statement of Financial Position NCBA Bank Kenya NCBA Group Consolidated Amounts in KES Millions 2022 2021 ∆% 2022 2021 ∆% Assets Net Loans and Advances 249,899 220,020 14% 278,921 244,038 14% Investments 211,228 204,884 3% 228.778 218,808 5% Cash and Balances with Banks 49,753 76,86
Slide 43: NCBA Bank Kenya delivered the key financial metrics set for FY 2022
APPENDIX III NCBA Bank Kenya delivered the key financial metrics set for FY 2022 FULL YEAR 2022 TARGET FULL YEAR 2022 ACHIEVED Return on Average Equity > 15% 17.2% NPL ratio < 15% 12.8% Cost to Income Ratio 40-45% 38.2% Capital Adequacy (Total) 300Bps 344Bps Loan to Deposit Ratio 65% 59.2%