Standard Bank Group Limited · JSE:SBK
Standard Bank — Debt Investor Presentation (February 2023)
30 slides from Standard Bank's debt investor presentation, February 2023
Slide 1: Standard Bank Group Investor Briefing
Standard Bank Group STANDARD BANK GROUP INVESTOR BRIEFING February 2023
Slide 2: Contact details
Contact details Jan Brits Paul Burgoyne Tshepo Hlongwane Head: Group Capital Management Head: Treasury and Money Markets Head: Trading, Money Markets Tel: +27 11 415 4344 Tel: +27 11 415 6010 Tel: +27 11 415 8221 Email: Email: Email: Jan.Brits2@standardbank.co.za Paul.Burgoyne@standardbank.co.za Tsh
Slide 3: Agenda
Agenda 1 Market Update 04 2 Sustainability Strategy 07 3 Funding and Liquidity 12 4 Regulatory Update 16 5 Capital Management 22 6 Tier 2 Green Bond 26 7 Annexure 33 3
Slide 4: Market Update
Standard Bank ITCANBE..
Slide 5: Local Issuance Landscape
Local Issuance Landscape Economic Indicators Debt capital market issuances (Rbn) Indicator 2022 2023 2024 2022 vs. 2022 vs. ▪ Bond issuances totalled ~R137bn in 2022, up 19% from 2021. R’bn 2019 2020 2021 2022 2021 2019 Likely to continue gradual recovery to pre-pandemic levels GDP 2.30 1.30 1.80 Co
Slide 6: Bank Issuance Landscape and Outlook
Bank Issuance Landscape and Outlook 2023 Outlook Annual Change in Net Outstanding per Instrument Type (Big Five Banks) 30 ▪ Scheduled bond redemptions in 2023 totaling ~R133bn, 5% higher than 25 in 2022. Financials account for ~R47bn of the total 20 ▪ Expected net positive senior issuances from Bank
Slide 7: Sustainability Strategy
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Slide 8: Sustainability, SEE and ESG
Sustainability, SEE* and ESG Africa is our home, we drive her growth Given our purpose of driving Africa's growth, and that our business includes sectors rated as high ESG risk, best practice ESG risk management is the foundation for delivering positive social, economic and environmental (SEE) impac
Slide 9: Standard Bank's SEE impact areas
Standard Bank’s SEE impact areas Standard Bank Group impact areas Climate Job creation Africa Financial change and and enterprise Infrastructure trade and Education Health inclusion sustainable growth investment finance We enable more We work with our clients to We support the We facilitate the We w
Slide 10: How we measure our ESG performance
How we measure our ESG performance Latest S&P CSA Latest Sustainalytics Score: 66 Score: 24.7 10
Slide 11: Climate Policy
Climate Policy SBG Climate Policy Summary Initial sector focus Expanded sector Focus – by 2025 ▪ SBG’s ambition is to support Africa’s fair contribution to 1.5 degrees ▪ Oil ▪ Insurance ▪ Commitment to net zero carbon emissions from own operations for ▪ Gas newly built facilities by 2030, for existi
Slide 12: Funding and Liquidity
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Slide 13: Market Update
Market Update NCD Issuances and Pricing Levels (Tbill Comparative) 180 1,10% 160 0,90% 140 0,70% ▪ SBSA NCD issuance market share was relatively high at 34% 174 120 153 149 0,50% during 2022 145 144 138 138 100 123 ▪ Benchmark 12-month NCD pricing reduced in H2:2022 driven by 102 80 0,30% 94 91 91 8
Slide 14: Redemption profiles
Redemption profiles SBSA debt capital markets redemptions (ZARbn) SBG and SBSA funding sources 48 3% 37 SBG 29 9% FY21 3% 15 16 9% 30% 4% 21% 31% 6% 10% 6% 2023 2024 2025 2026 2027 Structured Notes Senior debt Subordinated debt Syndicated/Bi-lateral loans 12% SBSA DFI loans Offshore T2 NCD (> 1 year
Slide 15: Strong liquidity position
Strong liquidity position Basel III Liquidity Coverage Ratio Key liquidity ratios remained in excess of minimum regulatory requirements throughout 2022 160,0% 144,3% 143,5% 138,4% 134,8% 140,0% 124,4% 116,8% 119,1% 112,6% 110,8% 120,0% 110,1% Liquidity Coverage Ratio (LCR) 100,0% 80,0% ▪ SBSA LCR ra
Slide 16: Regulatory Update
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Slide 17: Proposed resolution regime
Proposed resolution regime Proposed creditor hierarchy ▪ Financial Sector Laws Amendment Act Secured creditor ▪ Repo’s ("FSLAA") has been signed into law but is not yet effective Preferred creditors ▪ In line with Insolvency Act (e.g. Tax, Staff entitlements, etc) ▪ FSLAA amends various aspects of l
Slide 18: Resolution strategy and bail-in powers
Resolution strategy and bail-in powers Proposed creditor hierarchy Resolution Strategy Statutory vs. Contractual Total Loss (Regulatory) Bail-in Powers Absorption Capacity Open-bank resolution Statutory bail-in appropriate for banks with FLAC instruments Bank continues to function in its existing
Slide 19: FLAC Instruments
FLAC Instruments Qualifying criteria and calibration Main Qualifying Criteria Calibration of Minimum Requirements ▪ Issued by the holding company (capital and FLAC). Time to be ▪ Base minimum FLAC requirement (bMFR) - minimum capital provided for transition of Opco issued instruments to Holdco requi
Slide 20: Industry requirements
Industry requirements Base minimum FLAC requirements (bMFR) Industry FLAC requirements vs. senior funding FLAC requirements per bank vs. senior funding ▪ Estimated total industry bMFR of ~R295bn by 2028 maturities (Rbn) maturities (Rbn) 76 79 72 ➢ Assuming 2023 implementation and six-year 60 60 phas
Slide 21: Interest Rate Benchmark – JIBAR Reform
Interest Rate Benchmark – JIBAR Reform ▪ The Market Practitioners Group (MPG) has published a white paper that proposes market conventions for derivative Interest rate benchmark reform Journey products that will use the newly launched South African Rand Overnight Index Average (ZARONIA) as the desig
Slide 22: Capital Management
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Slide 23: Capital adequacy
Capital adequacy Robust capital position, materially above regulatory requirements SBG and SBSA meet the Prudential Authority’s Basel III aligned requirements ▪ SBG and SBSA remain adequately capitalised with capital SBG Capital Adequacy SBSA Capital Adequacy adequacy ratios above minimum requiremen
Slide 24: Capital adequacy: resilience over time
Capital adequacy Resilience over time SBG capital adequacy (%) & RWAs (Rbn) Organic CET1 generation1 (%) 16,7 16,9 16,6 ▪ Extensive track record of prudent capital management 18 16,0 16,0 16,1 16,0 2500 16 3,1 ▪ September 2022 capital ratios inclusive of 1H22 14 2000 3,0 2,8 dividend payments 12 14,
Slide 25: Capital adequacy: Tier 1 and Tier 2 capital
Capital adequacy Tier 1 and Tier 2 components of the capital stack SBG and SBSA Tier 1 capital (%) 1,4 1,3 ▪ Tier 1 and Tier 2 capacity of approximately 2.3% of 1,2 RWA respectively for SBG and SBSA1 1,0 ➢ Excluding confidential Pillar 2B requirements 0,8 0,6 0,6 0,9 0,9 ➢ Lower D-SIB buffer require
Slide 26: Tier 2 Green Bond
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Slide 27: Proposed Transaction – Tier 2 Green Bond
Proposed Transaction – Tier 2 Green Bond Standard Bank Group Limited’s 3rd Tier 2 Green Bond Proposed Issue ▪ Up to R2bn [10 Non-Call 5 years] Tier 2 Green Bond to be issued under the Group’s Sustainable Bond Framework (“SBF”) off its DMTN Programme and listed on the JSE’s Sustainability Segment ▪ T
Slide 28: Indicative Offering
Indicative Offering DMTN PROGRAMME Issuer Standard Bank Group Limited Issuer Long Term Rating Moody’s – Global: Ba3 & Fitch – Global: BB-, National: AA+(zaf) DMTN Programme Size R50bn listed on the Interest Rate Market of the JSE KEY TERMS Issuance Green Tier II Capital Note Auction Date [27/28 Febr
Slide 29: Thank You
07 Thank You Standard Bank ITCANBE..
Slide 30: Disclaimer
DISCLAIMER This presentation has been prepared by Standard Bank Group Limited and its subsidiaries, including The Standard Bank of South Africa Limited (“SBSA”) (hereinafter, the “Group”). This presentation is strictly confidential and is being provided to you solely for your information, and may no
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