Absa Bank Kenya Plc · NSEKE:ABSA
Absa Bank Kenya — H1 2023 Earnings Presentation
29 slides from Absa Bank Kenya's earnings presentation, 2023
Slide 1: H1 2023 Investor Briefing
Absa Bank Kenya PLC H1 2023 Investor Briefing
Slide 2: Contents
Contents • Business Overview • Financial Performance • Strategic Outlook & Guidance
Slide 3: Abdi Mohamed, Chief Executive Officer
Abdi Mohamed Chief Executive Officer
Slide 4: H1 2023 Investor Briefing
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Slide 5: Living our purpose through shared value by transforming communities we operate in
H1 2023 Investor Briefing Living our purpose through shared value by transforming communities we operate in Building upon our commitment to being a responsible corporate citizen, we Through transparent and cooperative relationships with government entities, we actively engage with local communities
Slide 6: Living our purpose by supporting our customers through inclusive financing
H1 2023 Investor Briefing Living our purpose by supporting our customers through inclusive financing Empowering Women-led Businesses Supporting SMEs’ SMEs’ Financing Micro Funding We committed a total of KES 10 We have supported over 10,000 We have implemented Risk Based We have advanced KES 9.3 bil
Slide 7: Living our purpose through sustained innovation towards delivering for the customer
H1 2023 Investor Briefing Living our purpose through sustained innovation towards delivering for the customer Mobi Tap Payment Buy Now Digital Medical Solution for SMEs Pay Later Savings Account Evacuation First-in-the-market payment solution that allows small First-to-market innovation that will Hi
Slide 8: Living our purpose towards supporting our colleagues achieve their aspirations
H1 2023 Investor Briefing Living our purpose towards supporting our colleagues achieve their aspirations Career Growth Culture Care Contribution Partnered with Strathmore to Deliver Improved Colleague Certified 2-Years for Colleagues to 73.4% in a row
Slide 9: Sustaining growth momentum, prudence, readying for the next phase of transformation
H1 2023 Investor Briefing Sustaining growth Prudently managing the Readying for the next Momentum business through phase of transformation complex environment
Slide 10: On Momentum: Sustaining business growth momentum as we execute our new strategy
H1 2023 Investor Briefing On Momentum: Sustaining business growth momentum as we execute our new strategy We diversified and achieved growth with GTR 1 We are sustaining momentum in early days of our new strategy Revenue Market Share2 8% 9% 27.4 31% - Strengthening the core businesses 20.9 1.5x | 9%
Slide 11: On Momentum: Brand building efforts for local relevance
H1 2023 Investor Briefing On Momentum: We are achieving significant milestones with our brand building efforts for local relevance Brand Awareness score 2019 2020 2023 Other Scores Our efforts are being recognized by external stakeholders in areas of #1 Most Reputable Financial Institution #1 Most T
Slide 12: On Momentum: We continue to embed sustainability at the core of our strategy
H1 2023 Investor Briefing On Momentum: We continue to embed sustainability at the core of our strategy Our Framework Delivering our Role in Society through Four Pillars Social and Governance and Thought Environment Economic Pillar Reporting Pillar Leadership Pillar • Robust Climate risk • Education
Slide 13: On Prudence: Navigating a persistent complex operating environment
H1 2023 Investor Briefing On Prudence: We are navigating a persistent complex operating environment with addressable risks and opportunities 1. Introduction of Risk Based Pricing to 1. Inflation: While inflation has been 1. Working closely with our clients to increase accessibility to credit elevate
Slide 14: On Transformation: Commencing the next phase of transformation
H1 2023 Investor Briefing On Transformation: After exceeding expectation with our GTR1 2017-2022 strategy, we are commencing the next phase of transformation Our Transformation into the next horizon is anchored on six areas…. A Robust Retail A Regional Expansion Strategy Partner of Choice Powerhouse
Slide 15: Yusuf Omari, Chief Financial Officer
Yusuf Omari Chief Financial Officer
Slide 16: Bolstered balance sheet: Growth across all our businesses
H1 2023 Investor Briefing Bolstered balance sheet: Growth across all our businesses with diversification from a product and currency perspective Loans and Advances Deposits (In KES bn unless stated otherwise) YoY +22% YoY +18% 333 318 309 314 306 289 283 282 283 262 Jun 22 Sep 22 Dec 22 Mar 23 Jun 2
Slide 17: Significant momentum in revenue: Diversified growth of 31%
H1 2023 Investor Briefing Significant momentum in revenue: Diversified growth of 31% with New Businesses materially contributing to the growth NII and NFI (In KES bn unless stated otherwise) 31% Markets 8.1 26% NFI Corporate 6.5 Bank Consumer 19.2 NII 14.4 Business 33% Bank H1 2022 H1 2023
Slide 18: Sustained improvement in efficiency
H1 2023 Investor Briefing Sustained improvement in efficiency: Our efficiency levels improved to 37% despite increase in costs, we are sustaining investments to support future growth growth from inflation and investments Improved (In KES bn unless stated otherwise) 15% 10,137 bn 8,836 bn Staff Cost
Slide 19: Resilient balance sheet: Sustaining portfolio quality while growing
H1 2023 Investor Briefing Resilient balance sheet: Sustaining portfolio quality while growing balance sheet in a tough operating environment relative to growth Ratio (In KES bn unless stated otherwise) 318 14.5% +22% Industry 2 261 234 9.2% 209 Customer 195 Assets 7.0% +74% 4.3% 3.3% Loan 2.3% Loss
Slide 20: Accelerated top-line driven profitability and balance sheet growth
H1 2023 Investor Briefing Accelerated top-line driven profitability and balance sheet growth (In KES bn unless stated otherwise) P&L Indicators H1 2022 H1 2023 Comment Income 20.9 27.4 31% Net Interest Income 14.4 19.2 33% Non Funded Income 6.5 8.1 26% Operating Costs (8.8) (10.1) (15%) Impairment (
Slide 21: Cost Income Ratio showing marked improvement with better Return-on-Equity
H1 2023 Investor Briefing Cost Income Ratio showing marked improvement with profitability supporting better Return-on- Equity Indicators H1 2022 H1 2023 Cost to Income Ratio 42% 37% Marked improvement (500 bps) Increased due to the current macro-economic Loan Loss Rate 2.3% 3.3% environment Yield on
Slide 22: Strong capital and liquidity ratios with an interim dividend
H1 2023 Investor Briefing Strong capital and liquidity ratios: Providing capacity to support growth ambition and capital distribution with an interim dividend Ratio Ratio Ratio Core Capital Ratio Total Capital Ratio Liquidity Ratio Regulatory Minimum Regulatory Minimum 18. 0% Regulatory Minimum Stro
Slide 23: Moses Muthui, Chief Strategy Officer
Moses Muthui Chief Strategy Officer, Absa Finance Director, Absa Corporate & Investment Bank
Slide 24: Next Horizon Strategy: three priorities and three enablers
H1 2023 Investor Briefing Next Horizon Strategy: Our goal is to build a business that consistently outperforms the industry, through three priorities and three enablers A market leader in Business banking A 3 Priorities powerhouse Corporate & A Modern-Day Investment Consumer Bank in Financial Connec
Slide 25: Our Three Strategic Priorities Guide our Desired Strategic State
H1 2023 Investor Briefing Our Three Strategic Priorities Guide our Desired Strategic State Kenya has c.40mn people accessing financial We will aim to strongly grow and diversify our A Robust Retail Expansion Strategy services, with the consumer segment remaining conventional retail business while ev
Slide 26: Our Three Enablers Guide our Investment Approach
H1 2023 Investor Briefing Our Three Enablers Guide our Investment Approach The 4IR1 will create natural winners and losers We will aim to modernize our core technology A digital leader in financial services, yet those who win will chassis, while executing a digital retain open preferences for custom
Slide 27: Guidance: Our Strategy Supports A Positive Medium-term Guidance
H1 2023 Investor Briefing Guidance: Our Strategy Supports A Positive Medium-term Guidance Principal financial metrics …Medium term target Growth Revenue market share above 10% Efficiency and re-investment Capacity Cost-To-Income Ratio of c.45% Shareholder Returns Return on Equity above our Cost of E
Slide 28: Disclaimer
Disclaimer Forward-looking statements Certain statements in this document are forward looking that relate to, among other things, the plans, objectives, goals, strategies, future operations and performance of Absa Bank Kenya PLC . Words such as “anticipates”, “estimates”, “expects”, “projects”, “bel
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