FirstRand Limited · JSE:FSR
FirstRand — FY2006 Earnings Presentation
24 slides from FirstRand's earnings presentation, Sep 23, 2006
Slide 1: 2006 Year End Results Presentation
2006 Year End Results Presentation
Slide 2: Agenda
Agenda • Financial highlights • Growth themes • Concluding remarks – Strategic issues – Prospects
Slide 3: The Group delivers to shareholders
The Group delivers to shareholders June ’06 % change R’ bn Normalised Headline earnings 8.8 21 Dividends per share (cents) 66 20 Return on equity (%) 25 Total assets 772 24
Slide 4: With a track record of superior growth
With a track record of R superior growth 180 Normalised EPS 157 160 140 131 CAGR +19% 115 120 101 100 80 76 63 60 54 46 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006
Slide 5: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 6: Low interest rates were a catalyst for growth
Low interest rates were a catalyst for growth • Higher asset values • Higher levels of borrowing • Lower levels of bad debts • Better equity markets
Slide 7: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 8: A new consumer has emerged
A new consumer has emerged 1996 2004 70.00% Lower income categories 60.00% (LSM 1-5) Higher income categories 50.00% (LSM 6-10) 40.00% 30.00% 20.00% 10.00% 0.00% • Growth in economy • Employment growth • Employment equity • Tax and interest rate cuts
Slide 9: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 10: RMB's leadership in BEE
RMB’s leadership in BEE Structured Finance – Structuring – Lending Private Equity BEE Corporate finance – Investment – Advisory – Equity raising Jan 04 – Jun 06 RMB mandated for 44% of BEE deals by value
Slide 11: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 12: Pursuing organic growth
Pursuing organic growth • WesBank new business 28% • FNB HomeLoans new business 58% • FNB Card advances 36% • FNB Corporate deposits 29% • RMB Private Bank advances 28% • Momentum new business 38% • Discovery Life new business 25%
Slide 13: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 14: Collaboration adding value
Collaboration adding value FNB branded products Product skills Distribution Middle market Mass market Increased contribution to earnings after tax from R18m to R58m
Slide 15: Growing our distribution channels
Growing our distribution channels FNB FNB collaboration collaboration 9% 18% Agents 12% Agents 20% Brokers 79% Brokers 62% 2005 2006
Slide 16: Leveraging off skills and platforms
Leveraging off skills and platforms FirstRand STI Holdings Group 50% 50% 100% Insurance Short-term Company Limited Insurance Company • Start up in 2005 • Ahead of business plan
Slide 17: Discovery Card on a roll
Discovery Card on a roll Electron Silver Gold Platinum 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2004 2005 73% of Vitality members now have a Discovery Card
Slide 18: And customers are spending
And customers are spending R’mil 4 000 3 000 2 000 1 000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2004 2005 2006
Slide 19: Bancassurance still growing strongly
Bancassurance still growing strongly Retail NPBT from insurance operations up 28% Existing operations June 05 (R’m) June 06 (R’m) % change OUTsurance 214 225 5 FirstLink 60 68 13 WesBank 267 394 48 HomeLoans 63 63 0 FNB Life 20 49 >100 FNB Consultants 49 63 29 Total 673 862 28
Slide 20: With significant growth in the pipeline
With significant growth in the pipeline Start up operations R’ mil Date started June 06 FNB middle market Jan 06 (23) Momentum Short Term Oct 05 (21) Discovery Card Oct 04 (93) Total (137)
Slide 21: Capitalising on our environment
Capitalising on our environment Macro-economic environment Our strategy • Lower inflation and interest • Organic growth rates • Collaboration between business • Emerging black consumer units • Black economic empowerment • Owner-manager culture
Slide 22: Owner manager culture key to our success
Owner manager culture key to our success • Leading brands in niche markets
Slide 23: Changing the insurance landscape
Changing the insurance landscape Product Ranked 1 Ranked 2 Ranked 3 Health Investment products Life Risk products Motor insurance Other Customer relationships Innovations Marketing strategies Technically competent staff Source: PWC Peer review
Slide 24: Owner-manager culture key to our success
Owner-manager culture key to our success • Leading brands in niche markets • Empowered and experienced management and staff • Seek to differentiate and innovate • Each business is committed to growth strategy