Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — FY2023 Earnings Presentation
40 slides from Stanbic's earnings presentation, 2024
Slide 1: Financial Results Presentation
Stanbic Holdings Plc Financial Results Presentation For The Year Ended 31st December 2023 Kenya / South Sudan is our home, we drive her growth
Slide 2: Introduction, Reflecting On Our Journey, Financial Outcomes
01 Introduction 02 Reflecting On Our Journey 03 Financial Outcomes 2 2
Slide 3: Dividend per share Kes15.35
01 INTRODUCTION DIVIDEND PER SHARE Kes15.35 UP FROM Kes12.60 IN 2022 3
Slide 4: East Africa Region Offers Attractive Fundamentals for Growth
EAST AFRICA REGION OFFERS ATTRACTIVE FUNDAMENTALS FOR GROWTH 4
Slide 5: Kenya, Tanzania and Uganda's Trade to EAC Is Increasing
KENYA, TANZANIA AND UGANDA’S TRADE TO EAC IS INCREASING, USD 3.1BN IN 2018 TO USD 5.4BN IN 2022, DUE TO REGIONAL INTEGRATION, IMPROVED INFRASTRUCTURE AND INCREASED DEMAND 5
Slide 6: Operating Environment - Regional Overview
OPERATING ENVIRONMENT - REGIONAL OVERVIEW ∙ Interest rates are rising across the region ∙ Inflationary pressure eased in second half ∙ Malawi & Kenya currencies faced significant pressure in 2023 ∙ FX Reserves below the 4-month import cover in all markets except Tanzania Sources: Central Banks Data
Slide 7: Operating Environment - Kenya Overview
OPERATING ENVIRONMENT - KENYA OVERVIEW A Challenging Macro Economic Environment In 2023 And A Cautiously Optimistic Outlook For 2024 ∙Kenyan Economy - 2023 The Kenyan economy recorded an average of 5.4% GDP Economic Prospects for 2024 growth in second quarter of 2023 compared to a 5.2% growth within
Slide 8: Who We Are
WHO WE ARE Our Purpose Our Vision KENYA / SOUTH SUDAN IS OUR TO BE A LEADING FINANCIAL SERVICES ORGANISATION IN HOME, WE DRIVE HER GROWTH. KENYA AND SOUTH SUDAN, DELIVERING EXCEPTIONAL KEY HIGHLIGHTS CLIENT EXPERIENCES AND SUPERIOR VALUE Customers 266K 2020: 185K Stanbic Bank Kenya Ltd Branches Bank
Slide 9: Market Positioning
MARKET POSITIONING DELIVERING SUSTAINABLE RETURNS Double digits growth in profit after tax; profits growing above industry SBG Securities: No.1 equities broker by market share Consistent dividend pay-out Total Equity Increased shareholder value 9
Slide 10: Reflecting On Our Journey: Return on Equity 18.6%
02 Reflecting On Our Journey RETURN ON EQUITY 18.6% Up 333 bps Year on Year 10
Slide 11: Over the Last 3 Years, Our Strategic Intent Was Geared Towards
OVER THE LAST 3 YEARS, OUR STRATEGIC INTENT WAS GEARED TOWARDS; OUR PURPOSE Kenya / South Sudan is our home, we drive her growth. To be a leading financial services organisation in Kenya and South Sudan, delivering OUR VISION exceptional client experiences and superior value. Our strategic prioritie
Slide 12: Complex Operating Environment
IN EXECUTING OUR STRATEGY, WE HAD TO NAVIGATE A COMPLEX OPERATING ENVIRONMENT: 2020 2021 2022 2023 RUSSIA- UKRAINE COVID CONFLICT DROUGHT FLOODS SVB FDIC US BANK FIRST FAILURES SIGNATURE REPUBLIC Complex operating environment LOCUST INVASION LINGERING EFFECTS OF COVID-19 ELECTIONS IN KENYA ISRAEL- G
Slide 13: Reflecting on Our 2020-2023 Journey: Transforming Client Experience
REFLECTING ON OUR 2020 – 2023 JOURNEY : TRANSFORMING CLIENT EXPERIENCE 2020 2021 - 2023 Key highlights Outcomes (Kenya & Total customer numbers South Sudan) 43% up (2023 vs 2020) KARGO PAY USER MANUAL Largest transaction in the Borderless banking 1st Bank to issue 24/7 billing & settlement Value of
Slide 14: Reflecting on Our 2020-2023 Journey: Executing with Excellence
REFLECTING ON OUR 2020 - 2023 JOURNEY: EXECUTING WITH EXCELLENCE 2020 2023 2021Key Highlights - 2023 Key highlights Outcomes Outcomes Double Digit PAT Growth Automated the trade process Improved TAT from 3hrs to 39% 26% 34% approximately 30min Aligned collection to Automated the customer cashflows T
Slide 15: Driving Sustainable Growth & Value: A Unique Way of Banking
REFLECTING ON OUR 2020 - 2023 JOURNEY: DRIVING SUSTAINABLE GROWTH & VALUE SEE Impact A Unique Financial Inclusion and Enterprise Development Way Of ∙ 1,634 MSMEs benefitted from grants, capacity building & Banking access to finance ∙ KES 208m in grants and catalytic funding ∙ KES 19.3b loans issued
Slide 16: Driving Sustainable Growth & Value
REFLECTING ON OUR 2020 - 2023 JOURNEY: DRIVING SUSTAINABLE GROWTH & VALUE Signatory to UN Global compact SEE Impact Trade and Investment ∙ KES 95.7b trade facilities Education ∙ Education Sponsorships – 116 students sponsored Diversity & inclusion Brigid Koskei Foundation Fees for 50 students, desks
Slide 17: Trusted Financial Partner
TRUSTED FINANCIAL PARTNER We are part of the largest financial services group in Africa Making our presence felt What are we known for? ∙ WORLD’S BEST INVESTMENT BANK IN KENYA ∙ Best Investment Bank in Kenya 2013-2023 Global Finance ∙ 113 years of serving our ∙ WORLD’S BEST SUB-CUSTODIAN clients (Es
Slide 18: Looking Ahead - 2024 to 2026 Ambition
LOOKING AHEAD - 2024 TO 2026 AMBITION Our Purpose Our Vision KENYA / SOUTH SUDAN IS OUR TO BE A LEADING FINANCIAL SERVICES ORGANISATION IN HOME, WE DRIVE HER GROWTH. KENYA AND SOUTH SUDAN, DELIVERING EXCEPTIONAL CLIENT EXPERIENCES AND SUPERIOR VALUE STRATEGIC 1 PRIORITIES 2 3 Transform Execute Drive
Slide 19: Financial Outcomes: Profit After Tax Kes12.2B
03 Financial Outcomes PROFIT AFTER TAX Kes12.2B UP 34% 19
Slide 20: 2023 Performance Reflection
2023 PERFORMANCE REFLECTION Strong projected Deteriorating Risk GDP growth rates Environment Balance Sheet, Revenue and Tailwinds Headwinds Rising cost of funds Margins growth Harnessing Inflationary and currency investments pressures on operating costs 20
Slide 21: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Our strategy is delivering the desired return outcomes Revenue Net Interest Cost to Margin Income 2023: 41.3b 2023: 5.97% 2022: 32.1b 2023: 43.5% 2022: 5.20% 2022: 46.7% 29% 77bps 312bps Credit Return On Loss Ratio Profit after tax 2023: 12.2b Equity 2023: 2.35% 2023: 18.
Slide 22: Key Financial Metrics Depict Strength, Resilience, Growth
KEY FINANCIAL METRICS DEPICT STRENGTH, RESILIENCE, GROWTH, EFFICIENCY AND BETTER RETURNS Profit After Tax Key highlights The Group (Kenya Bank, South Sudan Branch, SBG Securities and Stanbic Insurance Agency Limited) reported a profit after tax of KES 12.2b; ▪ Improvement in Net Interest Income on th
Slide 23: Steady Growth in All Income Lines
STEADY GROWTH IN ALL INCOME LINES 18 000 16 000 14 000 12 000 10 031 10 000 8 986 Trading and other income 8 000 Net fees and commissions 6 000 4 000 5 638 2 000 4 153 - Dec 2022 Dec 2023 Key Takeouts ▪ Balance sheet growth of 15% YoY with strategic management of the mix to cushion the Bank against
Slide 24: Pressure on Credit Risk and Cost Growth
PRESSURE ON CREDIT RISK AND COST GROWTH, HOWEVER REVENUE CONTINUED TO GROW FASTER Key highlight ▪ Growth in impairment charges mainly within Business and Commercial banking segment 24
Slide 25: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Customer Customer Total Assets Deposits 2023: 459b Loans 2023: 321b 2022: 400b 2023: 261b 2022: 271b 15% 2022: 235b 18% 10% Liquidity Total Capital NPL Ratio Ratio (Bank) Ratio (Bank) 2023: 9.47% 2022: 11.09%* 2023: 40.2 2023: 16.6% 162bps Statutory Statutory Minimum:20% min
Slide 26: Growth in Key Performance Drivers
GROWTH IN KEY PERFORMANCE DRIVERS Key highlights ▪ Strong growth in customer loans with a 10% YoY growth underpinned by demand in energy, manufacturing and Telco sectors ▪ Strong growth in customer deposits largely due to the bank’s tactical strategy to mobilize liabilities 26
Slide 27: Double Digit Loan Book Growth
DOUBLE DIGIT LOAN BOOK GROWTH Net Loans and advances to customers Loans and advances by product Loans and advances by business unit Key Takeouts ∙ Loan growth across all business segments 27
Slide 28: A Healthy Book with Improved NPL Coverage and Recoveries
GENERALLY, A HEALTHY BOOK WITH IMPROVED COVERAGE FOR NPL PORTFOLIO AND SIGNIFICANT RECOVERIES Efforts to focus on intensity of recoveries, management of names showing signs of distress and an enhanced stakeholder engagement model 2.21% 2.35% 9.23% 9.01% 2.45% 2.18% 2.23% 11.64% 83.00% 81.75% 81.08%
Slide 29: Customer Deposits Growth and Retention Efforts
CUSTOMER DEPOSITS GROWTH AND RETENTION EFFORTS ARE DRIVING LIABILITIES MOBILISATION Despite the macro-economic conditions our deposits have grown by 18% year on year 29
Slide 30: Funding and Capital Constrained by Tight Market Liquidity
FUNDING AND CAPITAL CONSTRAINED BY THE TIGHT LIQUIDITY IN THE MARKET. HOWEVER, SUFFICIENT TO SUPPORT BUSINESS GROWTH Funding Liquidity Ratio (Bank only) Capital adequacy (Bank only) 30
Slide 31: Measuring Up Against Our 2023 Targets
MEASURING UP AGAINST OUR 2023 TARGETS 2023 FY Target 2023 FY Actual 1 Transform Customer Loans Above Industry 10% Client Customer Deposits Above Industry 18% Experience Non- Funded Income 50% 38% 2 Execute Cost to income ratio 45.5% 43.5% With (CTI) Excellence NPL Ratio 10.77% 9.47% 3 Drive Sustaina
Slide 32: Subsidiaries and Segment Performance
SUBSIDIARIES AND SEGMENT PERFORMANCE 3
Slide 33: Subsidiaries and Branch Performance
SUBSIDIARIES AND BRANCH PERFORMANCE PAT: KES 12.2b 34% up Stanbic Kenya Stanbic South Sudan Stanbic Bancassurance SBG Securities Intermediary Ltd 50% up 33
Slide 34: Summary Performance of Corporate and Investment Banking (CIB)
SUMMARY PERFORMANCE OF CORPORATE AND INVESTMENT BANKING (CIB) Key Takeouts ▪ Growth in interest income as a result of growth in loan book ▪ Continued strong performance on trading revenue on account of elevated client flows and higher margins in the year compared to prior year ▪ Diversified Investme
Slide 35: Summary Performance of Business and Commercial Banking (BCB)
SUMMARY PERFORMANCE OF BUSINESS AND COMMERCIAL BANKING CLIENTS (BCB) Key Takeouts ▪ Growth in net interest income as a result of growth in customer loans and deposits ▪ Increase in non-interest revenue supported by good client flows and growth in trade volumes ▪ Increased credit risk as a result of a
Slide 36: Summary Performance of Personal and Private Banking (PPB)
SUMMARY PERFORMANCE OF PERSONAL AND PRIVATE BANKING (PPB) Key Takeouts ▪ Growth in interest income as a result of margin improvement and balance sheet growth 6 289 4 809 31% 1 760 2 039 (14%) ▪ Increase in non-interest revenue mainly driven by Improved transactional revenues following re-introductio
Slide 37: Summary Performance of Insurance and Asset Management (IAM)
SUMMARY PERFORMANCE OF INSURANCE AND ASSET MANAGEMENT (IAM) Key Takeout ▪ Increased revenue due to: 9 5 80% • Growth in bancassurance business 529 521 Partly offset by 2% 538 • Slowdown in investments revenue as a 526 2% result of a challenging operating environment (259) (244) (6%) 279 282 (1%) (84
Slide 38: Summary Performance of Stanbic Bancassurance Intermediary Limited
SUMMARY PERFORMANCE OF STANBIC BANCASSURANCE INTERMEDIARY LIMITED Key Takeout This performance reflects: ▪ Increase in volume of business placed with insurance companies ▪ Increased uptake on standalone insurance products and revenue from embedded insurance solutions 38
Slide 39: Summary Performance of SBG Securities Limited
SUMMARY PERFORMANCE OF SBG SECURITIES LIMITED Key Takeout ▪ This performance reflects: • Significant growth in revenue year on year, mainly driven by increased market share and growth in advisory revenue • Overall, SBG Securities was ranked 1st in equities trading, with a market share of 41% compared
Slide 40: Thank You
Thank You Kenya / South Sudan is our home, we drive her growth