Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — H1 2019 Earnings Presentation
34 slides from Stanbic's earnings presentation, 2019
Slide 1: Financial Results Presentation 1H19
STANBIC HOLDINGS PLC FINANCIAL RESULTS PRESENTATION 1H19
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 13 ❑ Corporate and Investment Banking (CIB) 22 ❑ Personal and Business Banking (PBB) 25 ❑ Stanbic Insurance Agency Limited (SIAL) 28 ❑ SBG Securities (SBGS) 31 Q&
Slide 3: Welcome and remarks
© Welcome and remarks
Slide 4: Operating environment
Operating environment Charles Mudiwa Chief Executive, Stanbic Bank
Slide 5: Complex operating environment
Complex operating environment Macro-economic Regulatory environment Market opportunities Market threats environment ▪ Interest rate caps ▪ Government’s Big 4 ▪ Cyber security risk Inflation ▪ June 2019 5.7% vs. ▪ IFRS 16 on leases ▪ Technological ▪ Increased competition June 2018 4.3% innovations fr
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 organisation 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
We continue to live our purpose by driving Kenya’s growth through various initiatives We believe that in order to be a truly sustainable business, we must pursue and create value that goes beyond financial outcomes. We express this belief through our SEE* model which can be obtained from our sustaib
Slide 9: Driving Kenya's growth through the Big 4 Agenda
Driving Kenya’s growth through the Big 4 Agenda Affordable Housing Manufacturing Invested in 20% of our total loan book Kenya Mortgage relates to financing to Refinance Company manufacturing sector (KMRC) Food Security Affordable Healthcare 9% of our total loan book relates to Africa banking partner
Slide 10: Driving Kenya's growth through financial markets
Driving Kenya’s growth through financial markets Lead transaction advisor and placement agent for one of the biggest equities transaction in Kenya One of the two Award winning transaction - Deal of the year Trusted Financial award by Deal Makers Africa Banks partner participating in Partnered with N
Slide 11: 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 UBER Academies 509 drivers supported to Completed financial fitness sessions for purchase their own cars to date 13 Corporates in 2019, 26 Corporates since inception Supporting M-kopa upcomi
Slide 12: Financial outcome
Financial outcome Total revenue Customer loans 15% 19% ◼ The Group (Kenya Bank, South Sudan branch, SBG 2019: KES 12.8b 2019: KES 161.9b Up Securities and Stanbic Insurance Agency Limited) reported Up 2018: KES 11.2b 2018: KES 136.5b a profit after tax of KES 4.1b ◼ Total revenue grew by 15% on acco
Slide 13: Drivers of performance
Drivers of performance Abraham Ongenge Chief Finance Officer
Slide 14: Summary income statement
Summary income statement June-2019 June-2018 change KES m KES m % Net interest income 6,702 5,608 20 Non-interest revenue 6,135 5,569 10 Total income 12,837 11,177 15 Operating expenses (6,041) (5,730) (5) Pre-provision profit 6,796 5,447 25 Credit impairment charges (1,235) (253) >(100) Tax (1,498)
Slide 15: Revenue
Revenue 12 000 KES millions 7 000 KES millions 6 000 10 000 5 000 8 000 Interest income 4 000 Trading and other income 6 000 Interest expense 3 000 4 000 Net interest income Net fees and commissions 2 000 2 000 1 000 - - June 2019 June 2018 June 2019 June 2018 ◼ Net interest income increased year on
Slide 16: Credit impairment and operating expenses
Credit impairment and operating expenses KES millions 1,400 2% 7 000 52.0% 51% 1,200 2% 6 000 51.0% 1.5% 50.0% 1,000 1% 5 000 49.0% Other operating 800 1% 4 000 expenses General debt provision 48.0% Staff costs 600 1% 3 000 Specific debt 47.0% CTI provision 400 1% 47% CLR 2 000 46.0% 200 1% 1 000 45
Slide 17: Summarised group balance sheet
Summarised group balance sheet June-2019 June-2018 Change KES millions KES millions % Assets Financial investments 94,099 91,541 3% Loans and advances to banks 15,172 17,558 (14%) Loans and advances to customers 161,912 136,477 19% Other assets 28,287 20,371 39% Property and equipment 3,306 2,271 46
Slide 18: Customer loans and advances
Customer loans and advances ◼ Customer loans and advances grew by 16% year on year mainly on term lending 165 000 161 912 KES millions 160 000 Loans and advances by business unit 155 000 150 000 June 2019 June 2018 145 000 140 000 136 477 135 000 PBB PBB 48% CIB 130 000 48% CIB 52% 125 000 52% 120 0
Slide 19: Customer loans and advances: Non performing loans (NPLs)
Customer loans and advances: Non performing loans (NPLs) 16 000 36.5% 37.0% NPLs by business unit 14 000 36.0% 12 000 35.0% June 2019 June 2018 34.0% Loan loss 10 000 33.0% provision 8 000 Discounted PBB 32.0% value of security 30% 6 000 PBB CIB 31.0% Coverage ratio CIB 42% 58% 4 000 30.0% 30.8% 70%
Slide 20: Customer deposits
Customer deposits ◼ Customer deposits grew by 20% year on year with core KES millions accounts accounting for 81% of total deposits 250 000 201 551 Customer deposits by business unit 200 000 167 306 June 2019 June 2018 150 000 100 000 PBB PBB CIB 44% 48% CIB 50 000 52% 56% - June 2019 June 2018 June
Slide 21: Funding, liquidity and capital
Funding, liquidity and capital 120% 20.0% 100% 18.0% 17.5% 17.4% 15% 15% 6% 5% 16.0% 80% 3% 3% 14.5% 14.7% 14.2% 14.5% 12% 14.0% 17% 60% 12.0% 10.5% 10.5% 40% 10.0% 64% 60% 8.0% 20% 6.0% 0% 4.0% June 2019 June 2018 2.0% Customer deposits Deposits from Banks Borrowings 0.0% Other liabilities Equity J
Slide 22: Corporate and Investment Banking (CIB)
Corporate and Investment Banking (CIB) Anton Marais Executive, Corporate & Investment Banking
Slide 23: CIB summary performance
CIB summary performance June-2019 June-2018 change ◼ Increase in net interest income as a result of KES m KES m % growth in the customer balance sheet Net interest income 3,376 2,969 14 ◼ Higher non interest revenue due to fees from key Non-interest revenue 4,825 4,373 10 deals in Investment Banking
Slide 24: CIB strategic priorities
CIB strategic priorities We want to deliver value to We want to partner with our We aspire to be the our clients through our deep clients to unlock their undisputed financial services sector expertise by focusing dreams provider of choice on: Client centricity We want to do valuable things for our c
Slide 25: Personal Business Banking (PBB)
Personal Business Banking (PBB) Thomas Bisonga Executive, Business Banking
Slide 26: PBB summary performance
PBB summary performance June-2019 June-2018 change ◼ Strong balance sheet growth on our focus KES m KES m % segments driven by acquisition of new to bank Net interest income 3,326 2,639 26 customers Non-interest revenue 1,310 1,196 10 Total income 4,636 3,835 21 ◼ Increase in net interest income exp
Slide 27: PBB strategic priorities
PBB strategic priorities ◼ Re-organising the business to better serve our clients ◼ Digital transformation ◼ Enhancing funding mobilization efforts ◼ Leveraging on ecosystems to drive growth in chosen markets ◼ Enhance risk awareness ◼ Effective cost management
Slide 28: Wealth
Wealth Julia Shisia Executive, Stanbic Insurance Agency
Slide 29: Stanbic Insurance Agency summary performance
Stanbic Insurance Agency summary performance June-2019 June-2018 change ◼ This performance reflects: KES m KES m % ❑ Decline in revenue due to slow uptake of Net interest income 5 5 0 stand alone products and reduction in Fees and commission 126 133 (5) advisory business ❑ Cost increase due to inves
Slide 30: Stanbic Insurance Agency strategic priorities
Stanbic Insurance Agency strategic priorities ◼ Increase penetration on the Bank’s customer base ◼ Review and leverage systems capabilities aligned to growth plan ◼ Manage regulatory environment ◼ Optimise relationship with other entities within the Group ◼ Investing in digital capabilities to offer
Slide 31: SBG Securities (SBGS)
SBG Securities (SBGS) Bethuel Karanja Executive Director, SBG Securities
Slide 32: SBGS summary performance
SBGS summary performance June-2019 June-2018 change ◼ SBG Securities posted revenues of KES 234m for KES m KES m % the half year ending 30th June 2019, indicating 31% year-on-year growth Brokerage commission 112 135 (17) ◼ This revenue performance reflects: Other revenue 122 43 >100 ❑A reduction in
Slide 33: SBGS strategic priorities
SBGS strategic priorities 2019 H1 market highlights ◼ The equities market in Kenya posted a 27% decline in trading turnover while competition for market share continued to intensify ◼ The equities market activity was mainly driven by foreign institutional investors who accounted for 73% of the total
Slide 34: Thank You
Thank You