FirstRand Limited · JSE:FSR
FirstRand — FY2020 Earnings Presentation
23 slides from FirstRand's earnings presentation, June 2020
Slide 1: FirstRand supplementary slides
FirstRand supplementary slides RESULTS PRESENTATION
Slide 2: Revenue split
2 Revenue split NET INTEREST INCOME* = 60% NON-INTEREST REVENUE = 40% Transactional NIR# 27% Lending Transactional NII** 21% Flow trading and residual risk Capital endowment UK operations 16% transactional income Investment banking FNB rest of Africa Other client† Insurance 9% Deposits Investing 6%
Slide 3: Drivers of topline
3 Drivers of topline GROSS REVENUE R million 30 000 q2% 25 000 p6% 20 000 p6% 15 000 10 000 p7% p4% 5 000 q5% 0 Lending Transactional NII Capital endowment UK operations Transactional NIR Insurance NET INTEREST INCOME NON-INTEREST REVENUE 2019 2020
Slide 4: Current portfolio mix – activity, geography and business
4 Current portfolio mix – activity, geography and business Investing Other UK Insure Transact UK operations‡ Save Rest of 5% WesBank and invest** Africa 4% 4% 12% Geographic Normalised earnings Revenue split PBT mix# 30% by activity* per operating (i.e. pre-minorities) business† 62% RMB 83% Lend FNB
Slide 5: Activity view of FNB performance
5 Activity view of FNB performance NORMALISED PBT R million 16 000 14 000 q18% 12 000 10 000 8 000 6 000 4 000 q63% p8% q18% 2 000 q32% 0 (2 000) q43% (4 000) Transactional ** Term lending Save and invest ** Insurance # Rest of Africa† Other 2019† 2020 * Transactional includes transactional deposit
Slide 6: Deposit values
6 Deposit values Deposit values (excl. cheques) – branches vs ADTs Deposit values – smartbox vs cash centres VALUES VALUES R billion R billion 60 60 ATM/ADT Smartbox 50 50 40 40 30 30 20 Branch 20 Cash centre 10 10 0 0
Slide 7: Recalibration of branch network continues
7 Recalibration of branch network continues INFRASTRUCTURE INVESTMENT TO TAKE FOCUS ON GROWTH IN COST REDUCTION OUT MORE COSTS LONG-TERM COSTS • Branch costs (2%) • Electronic channels • Staff costs +1% • Average branch m2 (3%) • Automated teller minutes (5%) • Long-term leases (1.9%) • Commitment t
Slide 8: Platform origination
8 Platform origination Card nav» Home Number of digital sales (thousands)* Pay-out value (R million) p25% 300 8 000 250 p19% 7 000 p>100% 6 000 200 q31% 5 000 150 4 000 100 3 000 2 000 50 1 000 0 0 2018 2019 2020 2018 2019 2020 Investing Insurance Number of accepted offers (thousands)** Number of ac
Slide 9: Commercial
9 Commercial Active customer base Platform adoption continues Number of customers Monthly logins (thousands) 700 000 10 000 600 000 p18% 8 000 500 000 2019 p5% 6 000 p82% q35% 400 000 2020 300 000 4 000 200 000 2 000 100 000 0 0 Banking app Online Banking app Online Merchant services Digital platfor
Slide 10: Advances
10 Advances FNB CONSUMER ADVANCES* FNB PREMIUM ADVANCES R billion R billion p9% y/y 270 45 14.6 q4% y/y 240 15.2 25.8 p10% y/y 2.7 23.5 15.9 p6% y/y 4.6 210 15.1 q26% y/y 180 30 8.3 2.2 q21% y/y 4.4 q4% y/y 150 120 7.5 q9% y/y 191.2 207.7 p9% y/y 90 15 25.9 60 16.7 q36% y/y 30 0 0 2019 2020 2019 202
Slide 11: Commercial advances
11 Commercial advances FNB COMMERCIAL ADVANCES R billion 35 p3% 30 p6% 25 q4% 20 15 p8% 10 q5% 5 p17% 0 Agric Property Business core Asset-based Specialised finance Other banking finance 2019 2020
Slide 12: FNB rest of Africa
12 FNB rest of Africa NORMALISED PBT R million 2 600 2 374 2 100 q17% 1 979 1 600 1 100 600 100 (400) (689) (830) (900) q20% Mature subsidiaries * Emerging subsidiaries** 2019 # 2020 * Mature subsidiaries: Botswana, Namibia, Eswatini (mature subsidiaries’ performance shown gross of minority interest
Slide 13: RMB performance split between SA and rest of Africa
13 RMB performance split between SA and rest of Africa RMB SOUTH AFRICA AND OTHER NORMALISED PBT REST OF AFRICA* NORMALISED PBT R million R million 9 400 2 300 p9% 1 900 6 900 q 22% p66% p 2% 1 500 4 400 q 18% 1 100 p19% 700 1 900 q 6% 300 q 34% q >100% (100) (600) 2019 2020 2019 2020 IB&A C&TB M&S
Slide 14: CIB rating profile
14 CIB rating profile WHOLESALE CREDIT PERFORMING BOOK 3% 7% • Proactive migration of counters based on expected adverse impact of COVID-19 63% 59% • Increased portfolio coverage ratio of 175 bps reflects COVID-19 impact • Cross-border up 12% in 34% 34% dollar terms 2019 2020 Investment grade Sub-in
Slide 15: Rate mix in WesBank retail VAF book
15 Rate mix in WesBank retail VAF book % OF TOTAL ADVANCES Jun 20 Jun 19 Fixed rate 35 40 PROPORTION OF WESBANK RETAIL VAF NEW BUSINESS Floating rate 65 60 80% 70% 67% 67% 63% 62% 60% 60% 51% 51% 49% 57% 50% 51% 43% 49% 49% 40% 40% 38% 37% 30% 33% 33% 20% 10% 0% Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Ju
Slide 16: WesBank credit portfolios
16 WesBank credit portfolios RETAIL VAF Impairment charge (R million) Credit loss ratio 2 200 3.0% 2 000 Long-run credit loss ratio = 1.40% 1 800 2.5% 1 600 1 400 2.0% 1 200 1.5% 1 000 800 1.0% 600 400 0.5% 200 0 0.0% Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun De
Slide 17: Aldermore funding breakdown
17 Aldermore funding breakdown FUNDING COMPOSITION COST OF FUNDS £ million % 16 000 1.67% 1.68% 1.8% 1.62% 14 000 1.50% 1.6% 22% 1.4% 12 000 7% 1.2% 10 000 8% 16% 1.0% 8 000 0.8% 6 000 0.6% 4 000 55% 0.4% 2 000 0.2% 0 0.0% Dec 18 Jun 19 Dec 19 Jun 20 Retail Business Corporate Institutional Cost of f
Slide 18: Residential mortgage portfolio
18 Residential mortgage portfolio 59% of the portfolio has a balance <£200k 7% 4% 24% 24% 11% 18% 19% 15% 10% 1% 4% 0% 0% 3% Geographical 9% 0 - 50k 50k - 100k - 150k - 200k - 300k - 400k - 500k - 1m - 2m 2m+ distribution of 100k 150k 200k 300k 400k 500k 1m residential mortgages 17% 9% Average LTV*
Slide 19: Buy-to-let portfolio
19 Buy-to-let portfolio c.78% of loans at £50k – £400k, with only 5% >£1 million 7% 4% 23% 7% 32% 17% 13% 13% 12% Geographical 7% 9% 2% 1% 3% 7% distribution of 0 - 50k 50k - 100k - 150k - 200k - 300k - 400k - 500k - 1m - 2m 2m+ buy-to-let 100k 150k 200k 300k 400k 500k 1m mortgages 11% Average LTV*
Slide 20: Asset finance
20 Asset finance 8% 9% 6% Majority of portfolio has an average balance of <£100k 7% 18% Geographical distribution of 9% asset finance portfolio 17% 40% 14% 20% 16% 13% 12% 6% 5% 0 - 50k 50k - 100k 100k - 200k 200k - 500k 500k - 1m 1m+ Greater London South East Midlands East Anglia North West South W
Slide 21: MotoNovo (VAF) portfolio
21 MotoNovo (VAF) portfolio 9% 9% 9% 9% Majority of portfolio has an average balance of £5k-£15k 7% Geographical 11% distribution of portfolio 8% 33% 16% 32% 16% 12% 7% 5% 10% 6% 0 - 5k 5k - 10k 10k - 15k 15k - 20k 20k- 25k 25k+ East Anglia Greater London North West Scotland South East South West Mi
Slide 22: UK operations market share
22 UK operations market share ORIGINATION MARKET SIZE* AND UK OPERATIONS’ ESTIMATED SHARE Residential mortgages** Buy-to-let mortgages** MotoNovo Standalone# < 1% 1.3% 11.0% RETAIL £218bn £42bn £16bn Commercial mortgages## Invoice finance** Asset finance† COMMERCIAL/SME 1.0% 2.0% 10.4% £44bn £21bn £
Slide 23: Current origination model
23 Current origination model JUNE 2020 ALDERMORE ORIGINATION BY CHANNEL Residential mortgages Buy-to-let mortgages MotoNovo Standalone 3% 13% 9% RETAIL £0.7bn £0.6bn £1.7bn 97% 87% 91% Commercial mortgages Invoice finance* Asset finance COMMERCIAL / SME 23% 42% 41% £0.4bn £0.2bn £0.9bn 58% 59% 77% D