Firstrand Limited · JSE:FSR
Firstrand — UBS Financial Services Conference, Cape Town 2018
26 slides from Firstrand's conference presentation, Oct 18, 2018
Slide 1: Beyond the Euphoria: Growing shareholder value despite challenging macros
BEYOND THE EUPHORIA: Growing shareholder value despite challenging macros Alan Pullinger, CEO: FirstRand UBS conference, Cape Town 18 October 2018
Slide 2: Group strategic framework
Group strategic framework FirstRand aims to create long-term franchise value, ensure sustainable and superior returns for shareholders within acceptable levels of volatility and maintain balance sheet strength DELIVERED THROUGH CURRENT STRATEGIES: Increase diversification – activity and geography Pr
Slide 3: Group strategic framework
Group strategic framework FirstRand aims to create long-term franchise value, ensure sustainable and superior returns for shareholders within acceptable levels of volatility and maintain balance sheet strength DELIVERED THROUGH CURRENT STRATEGIES: Increase diversification – activity and geography Pr
Slide 4: Group strategic framework
Group strategic framework FirstRand aims to create long-term franchise value, ensure sustainable and superior returns for shareholders within acceptable levels of volatility and maintain balance sheet strength DELIVERED THROUGH CURRENT STRATEGIES: Increase diversification – activity and geography Pr
Slide 5: Protecting and growing SA banking businesses has delivered outperformance and shareholder value
Protecting and growing SA banking businesses has delivered outperformance and shareholder value • Grew and retained customers across all segments • Advances and deposit growth in retail and commercial driven by cross-sell and up-sell • E-migration underpinned sustainability of transactional franchis
Slide 6: Strategy has played out in structurally higher ROA…
Strategy has played out in structurally higher ROA… % 8 7 6 3.50 3.41 3.30 3.32 3.25 5 3.05 4 3 2.06 2.12 2.07 2.07 2.03 1.92 2 1 3.69 3.85 3.96 3.94 3.89 3.73 0 (1) (2) (3.67) (3.66) (3.71) (3.70) (3.65) (3.47) (3) (4) (0.61) (0.58) (0.65) (0.68) (0.66) (0.62) (5) 2014 2015 2016 2017 2018 excl. ALD
Slide 7: …and enabled the group to deliver above-system growth
…and enabled the group to deliver above-system growth Growth in NAV + DPS Index, 2015 = 100 140 135 FirstRand 10.0% CAGR 130 125 Nominal GDP 6.7% CAGR 120 115 110 105 100 95 2015 2016 2017 2018
Slide 8: Group strategic framework
Group strategic framework FirstRand aims to create long-term franchise value, ensure sustainable and superior returns for shareholders within acceptable levels of volatility and maintain balance sheet strength DELIVERED THROUGH CURRENT STRATEGIES: Increase diversification – activity and geography Pr
Slide 9: Integrated financial services is not bancassurance
Integrated financial services is not bancassurance BANCASSURANCE MODEL INTEGRATED MODEL Partnership or one owns the other SUPPLY OF MONEY (LIABILITIES) INSURANCE BANKING ASSET MANAGEMENT OTHER INSURANCE BANK COMPANY Insurance company uses bank’s sales channel INTEGRATED FRM Insurance Bank’s sales co
Slide 10: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional)
Slide 11: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional) Identify CUSTOMER NEEDS/understand CONTEXT
Slide 12: Understanding customer context
Understanding customer context WEALTH Short-term insurance (protect assets), life insurance (protect family) Structure financial affairs for continuity Retire comfortably Save for Ensure family retirement welfare Save for children’s education Buy a house (mortgage) Buy a car Student loan LIFE STAGES
Slide 13: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional) Identify CUSTOMER NEEDS/understand CONTEXT Capture full customer value chain through integrated ecosystem
Slide 14: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional) Identify CUSTOMER NEEDS/understand CONTEXT Capture full customer value chain through integrated ecosystem Delivered through Provide PRODUCTS AND SERVICES Using appropriate to meet customer needs appr
Slide 15: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional) Identify CUSTOMER NEEDS/understand CONTEXT Capture full customer value chain through integrated ecosystem Delivered through Provide PRODUCTS AND SERVICES Using appropriate to meet customer needs appr
Slide 16: What does an integrated model look like?
What does an integrated model look like? CUSTOMERS (retail, commercial, corporate and institutional) Identify CUSTOMER NEEDS/understand CONTEXT Capture full customer value chain through integrated ecosystem Delivered through Provide PRODUCTS AND SERVICES Using appropriate to meet customer needs appr
Slide 17: Our right to compete in the save, invest and insure space
Our right to compete in the save, invest and insure space Banking businesses provide deep and loyal customer bases, distribution, product capabilities, data and platforms
Slide 18: Our right to compete in the save, invest and insure space
Our right to compete in the save, invest and insure space Banking businesses provide deep and loyal customer bases, distribution, product capabilities, data and platforms Group customers are already buying investment and insurance products from insurance providers (including us)
Slide 19: Significant opportunity in our customer base
Significant opportunity in our customer base Monthly insurance debit order flows from FNB customers (life and short-term insurance) Sep 17 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 FNB share of insurance premium flows Debit order premiums to other insurers
Slide 20: Our right to compete in the save, invest and insure space
Our right to compete in the save, invest and insure space Banking businesses provide deep and loyal customer bases, distribution, product capabilities, data and platforms Group customers are already buying investment and insurance products from insurance providers (including us) Use data analytics t
Slide 21: E-migration strategy enables integrated financial services through rich data and low-cost distribution
E-migration strategy enables integrated financial services through rich data and low-cost distribution Success of FNB’s strategy to migrate customers from physical to digital… Digital Physical 32% 29% 2009 2018 68% 71% Physical Digital …results in rich transactional data Collected and stored digital
Slide 22: Our right to compete in the save, invest and insure space
Our right to compete in the save, invest and insure space Banking businesses provide deep and loyal customer bases, distribution, product capabilities, data and platforms Group customers are already buying investment and insurance products from insurance providers (including us) Use data analytics t
Slide 23: Our right to compete in the save, invest and insure space
Our right to compete in the save, invest and insure space Banking businesses provide deep and loyal customer bases, distribution, product capabilities, data and platforms Group customers are already buying investment and insurance products from insurance providers (including us) Use data analytics t
Slide 24: Insurance – industry survey shows FNB Life is scaling fast
Insurance – industry survey shows FNB Life is scaling fast #1 in growth in new business in 2017 Overall growth Growth in mortality classes (all lines of business) 5% 4.2% #1 Digital direct market share 3.5% Change in market share by sum insured 2.9% 2.2% #1 Banks market share 0% All Risk Credit Fune
Slide 25: Save and invest – strong growth in deposit franchise and good traction in AUM
Save and invest – strong growth in deposit franchise and good traction in AUM Index Assets under management* June 2012 = 100 R billion 175 FirstRand’s domestic deposit 120 165 franchise Outperformance >R100 billion 100 over 6 years 155 80 145 52 46 43 135 M3 money 60 supply 37 125 29 40 115 48 50 20
Slide 26: SA strategy will drive outperformance and deliver sustainable shareholder value
SA strategy will drive outperformance and deliver sustainable shareholder value • Banking businesses already outperforming system growth • Targeted origination strategies and liability focus provide underpin to superior risk-adjusted margin and momentum to NII • Focus on core transactional relations
FirstRand — UBS Financial Services Conference, Cape Town 2018 on 6ix