Stanbic Holdings Plc · NSEKE:SBIC
Stanbic — FY2022 Earnings Presentation
38 slides from Stanbic's earnings presentation, March 2023
Slide 1: Financial Results Presentation for the year ended 31 December 2022
Stanbic Holdings Plc FINANCIAL RESULTS PRESENTATION for the year ended 31 December 2022 Kenya / South Sudan is our home, we drive her growth
Slide 2: Table of Contents
TABLE OF CONTENTS O1 Operating Environment O2 Delivering Our Strategy O3 Sustainable Returns 02
Slide 3: Operating Environment
OPERATING ENVIRONMENT Joshua Oigara Chief Executive, Stanbic Bank KES TOTAL DIVIDEND 2022: 55% of profit after tax 4.98B (2021: 50%) 03
Slide 4: We Are Part of the Largest Financial Services Group in Africa
WE ARE PART OF THE LARGEST FINANCIAL SERVICES GROUP IN AFRICA Stanbic Kenya • Established in 1911 • 74.92% owned by Standard Bank • 29 branches • 857 agent outlets 117 Stanbic Uganda • Established in 1906 YEARS • 69 Branches • 11 service point One Bank with Stanbic Tanzania borderless • Established
Slide 5: Operating Environment
OPERATING ENVIRONMENT Operating environment characterised by currency depreciation and rising inflation, however we remain well positioned to navigate these challenges GDP growth rates Inflation Rates 10.0% 80.0% 8.0% 7.5% 70.0% 4.7% 6.4% 69.4% 4.6% 5.9% 60.0% 6.0% 4.9% 4.5% 4.8% 5.5% 50.0% 4.0% 4.6%
Slide 6: Operating Environment
OPERATING ENVIRONMENT Improved Macro Outlook Geopolitical Risk • Improved macroeconomic • Russia-Ukraine war has environment across the resulted to increased region with strong projected geopolitical risks, weaker GDP growth rates economic growth, higher inflation and supply chain disruptions • Delay
Slide 7: Delivering Our Strategy
DELIVERING OUR STRATEGY Joshua Oigara Chief Executive, Stanbic Bank RETURN ON EQUITY 15.3% (UP 200bps) 07
Slide 8: 2022 Was Year 2 of Our Strategy
2022 WAS YEAR 2 OF OUR STRATEGY Delivering our strategy : Recap of our strategy Our Purpose: Our strategic priorities: Kenya/South Sudan is What we need to do to deliver our purpose our home, we drive Transform client experience Execute with excellence Drive sustainable growth and value her growth O
Slide 9: Priority Areas to Drive Growth & Future-Ready Transformation
4 PRIORITY AREAS TO DRIVE GROWTH & FUTURE-READY TRANSFORMATION Delivering our strategy : Our 3-year strategic aspiration & key focus areas are in motion Strengthen core Future-ready transformation Build on existing capabilities and right-to-win Develop new capabilities and business models Value focu
Slide 10: Strengthening the Core
STRENGTHENING THE CORE Delivering our strategy : Defending our current client franchise and market positions Staying true to our purpose Consumer Engagement DADA (Women • ʻZero fees’ campaign for Vehicle Infrastructure Support) • Loans issued: KES 15b Asset Financing & Mortgage • Dada @3 celebration
Slide 11: Delivering Our Strategy - Future Ready Transformation (Grow)
DELIVERING OUR STRATEGY - FUTURE READY TRANSFORMATION (GROW) Delivering our strategy : Driving business growth and value Accelerating digital banking Process efficiency Branch vs Digital Transactions Digital Lending (inc. Mjeki) • Instant loans: KES 36.7b (2021 KES 27.6b) Cloud journey continues; more
Slide 12: Delivering Our Strategy - Driving Impactful Growth
DELIVERING OUR STRATEGY - DRIVING IMPACTFUL GROWTH Infrastructure The Bank partnered with Moja Expressway to facilitate toll collections on the Nairobi Expressway Impact Jobs created for > 6,000 people Cement and Steel 40% of the contract value was sourced locally >10m users to date Reducing travel
Slide 13: Delivering Our Strategy - Driving Sustainable Growth
DELIVERING OUR STRATEGY - DRIVING SUSTAINABLE GROWTH Enterprise Development & Financial Inclusion Education • KES 76m in grants and catalytic funding disbursed to over 400 MSMEs (In partnership with strategic partners) Health – Cancer Screening • Over 100k individuals trained on digital literacy (fu
Slide 14: Trusted Financial Partner
TRUSTED FINANCIAL PARTNER Kenya’s Best Investment Bank What are we known for? Euromoney 2022 (4th time in a row) Financial Reporting Awards Best Investment Bank in Kenya (FIRE Awards, 2022) 2013 – 2022 • Overall Winner • Best in Kenya Best Trade Finance Bank in Kenya • Best listed company 2016 - 202
Slide 15: Delivering Sustainable Returns
DELIVERING SUSTAINABLE RETURNS Dennis Musau Chief Financial and Value Officer KES PROFIT AFTER TAX (UP 26%) 9.1B 15
Slide 16: How We Responded in Delivering on Our 2022 Purpose
HOW WE RESPONDED IN DELIVERING ON OUR 2022 PURPOSE Kenya / South Sudan is our home, we drive her growth What did we do? The Results Delivering on our purpose • Focused execution of strategy • Business growth (double digit Kenya/South Sudan is our home, • Investment in people and growth in key balanc
Slide 17: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS KES Revenue Net interest margin Cost to income 2021: KES 24.9b 5.4% 2021: 4.4% 46.7% 2021: 50.9% 32.1b 28% 100 bps 420bps KES Profit after tax Return on Equity KES Earnings per share 2021: KES 7.2b 15.3% 2021: 13.3% 2021: KES 18.23 9.1b 26% 200bps 22.92 26% Credit loss rat
Slide 18: Strong Consistent Growth in Our Performance
STRONG CONSISTENT GROWTH IN OUR PERFORMANCE Key Takeouts The Group (Kenya Bank, South Sudan branch, SBG Securities and Stanbic Insurance Agency Limited) Dec Dec Change reported a profit after tax of KES 9.1b; 2022 2021 % KES m KES m Improvement in Net Interest Income on the back of growth in the lend
Slide 19: Steady Growth in All Income Lines
STEADY GROWTH IN ALL INCOME LINES KES Millions KES Millions 30,000 26,087 15000 25,000 20,567 18,945 12000 20,000 14,373 15,000 9000 10,000 7,142 6,194 8,986 6000 5,000 6,484 Dec 2022 Dec 2021 3000 4,153 4,132 Interest income Interest expense Net interest income 0 Net interest income increased year
Slide 20: Operating Expenses and Credit Impairment
OPERATING EXPENSES AND CREDIT IMPAIRMENT KES Millions KES Millions 15,000 6,000 52.0% 4,944 51.0% 5,000 4,801 50.9% 12,000 7,689 6,190 50.0% 4,000 49.0% 9,000 3,000 2,569 2,524 48.0% 6,000 47.0% 2,000 46.7% 6,519 46.0% 1,000 3,000 7,279 143 45.0% 0 44.0% -45 0 Dec 2022 Dec 2021 -1,000 Dec 2022 Dec 2
Slide 21: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS KES Total assets 2021: KES 329b KES Customer loans 2021: KES 185b KES Customer deposits 2021: KES 242b 400b 22% 236b 27% 272b 12% NPL ratio Liquidity ratio Total capital ratio 9.07% 2021: 9.25% 18bps 45.2% Statutory minimum: 20% 16.8% Statutory minimum:14.5% 21
Slide 22: Growth in Key Performance Drivers
GROWTH IN KEY PERFORMANCE DRIVERS Dec 2022 Dec 2021 Change KES m KES m % Assets Financial investments 83,551 59,535 40% Loans and advances to banks 30,962 44,008 (30%) Loans and advances to customers 235,867 185,313 27% Other assets 36,402 26,654 37% Key Takeouts Property and equipment 2,861 2,991 (
Slide 23: 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 KES millions 2022 2022 250,000 61% Corporate & 235,867 75% Term lending Investment Banking (CIB) 15% Home Loans 16% Business & Commercial Clients (BCC) 6% Overdrafts 23
Slide 24: Asset Quality
ASSET QUALITY NPL and CLR KES Millions NPLs 25,000 22,756 20,000 18,242 10.00% 9.25% 9.05% 9.07% 8.55% 8.22% 15,000 8.00% 6.00% 10,000 4.00% 2.40% 2.21% 5,000 2.00% 1.40% 1.11% 1.10% 0% 0 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Dec 2022 Dec 2021 NPL CLR KES Millions 25,000 50% 20,000 44.7% Key Takeo
Slide 25: Deposits
DEPOSITS Customer Deposits Dec 2022 KES Millions KES Millions 300,000 62% Current accounts 73,682 24% Savings accounts 72,538 271,564 250,000 242,345 3% Call accounts 65,371 217,444 200,000 9% Fixed Deposits 56,467 194,222 191,585 2% LC acceptance 150,000 100,000 132,511 113,340 Dec 2021 50,000 Dec
Slide 26: Funding, Liquidity and Capital Remain Solid to Support Growth
FUNDING, LIQUIDITY AND CAPITAL REMAIN SOLID TO SUPPORT GROWTH Funding Liquid Ratio (Bank only) Capital Adequacey Ratio (Bank only) RWA - Risk weighted Assets 120% 60.00% 20.00% 17.3% 15.3% 47.9% 100% 50.00% 16% 17% 45.2% 16.8% 15.00% 13.8% 14.5% 5% 4% 80% 40.00% 3% 2% 8% 4% 10.5% 60% 30.00% 10.00% 6
Slide 27: Measuring Up Against Our 2022 Outlook
MEASURING UP AGAINST OUR 2022 OUTLOOK 2022 full year target 2022 full year Actual Customer loan growth Above industry 27% Customer deposit growth Above industry 12% Return on Equity 18.1% 15.3% Non funded income 50.0% 41% Cost to income ratio 45.5% 46.7% NPL ratio 9.36% 9.07% 27
Slide 28: Subsidiaries and Segment Performance
SUBSIDIARIES AND SEGMENT PERFORMANCE 28
Slide 29: Subsidiaries and Branch Performance
SUBSIDIARIES AND BRANCH PERFORMANCE Stanbic Holdings Plc PAT: 9.1b 26% up Stanbic Kenya Stanbic South Sudan Stanbic Bancassurance SBG Securities Intermediary Ltd Dec 2022 YoY Var Dec 2022 YoY Var Dec 2022 YoY Var Dec 2022 YoY Var PAT KES 8.8b 29% up PAT KES 307m 21% up PAT KES 111m 12% up PAT KES (1
Slide 30: Summary Performance of Corporate and Investment Banking (CIB)
SUMMARY PERFORMANCE OF CORPORATE AND INVESTMENT BANKING (CIB) Key Takeouts Dec 2022 Dec 2021 Change KES m KES m % Growth in interest income as a result of Net interest income 9,878 6,542 51 growth in loan book Non-interest revenue 7,979 7,636 4 Growth in non-interest revenue mainly due to increase i
Slide 31: Summary Performance of Business and Commercial Clients (BCC)
SUMMARY PERFORMANCE OF BUSINESS AND COMMERCIAL CLIENTS (BCC) Dec 2022 Dec Change Key Takeouts KES m 2021 % KES m Net interest income 4,258 3,757 13 Growth in net interest income as a result of growth in customer loans Non-interest revenue 3,121 1,631 91 Increase in non-interest revenue Total Income
Slide 32: Summary Performance of Consumer and High Networth Clients (CHNW)
SUMMARY PERFORMANCE OF CONSUMER AND HIGH NETWORTH CLIENTS (CHNW) Dec Dec Change Key Takeouts 2022 2021 % KES m KES m Net interest income 4,809 4,074 18 Growth in interest income as a result of growth in customer loans and margin Non-interest revenue 2,039 1,349 51 improvement Total Income 6,848 5,42
Slide 33: Summary Performance of Stanbic Bancassurance Intermediary Limited
SUMMARY PERFORMANCE OF STANBIC BANCASSURANCE INTERMEDIARY LIMITED Dec 2022 Dec Change Key Takeouts KES m 2021 % KES m This performance reflects: Total revenue 319 283 13% Increase in volume of business placed with insurance companies Total expenses (158) (138) 14% Increased uptake on standalone Profit
Slide 34: Summary Performance of SBG Securities
SUMMARY PERFORMANCE OF SBG SECURITIES Dec Dec Change Key Takeouts 2022 2021 % KES m KES m This performance reflects: Brokerage commission 97 136 (29) Decline in brokerage revenue, driven by a 32.6% year on year drop in equities Other revenue 82 68 21 market turnover Total revenue 179 204 (12) Increas
Slide 35: 2022 Key Take Away
2022 KEY TAKE AWAY Client Employee Risk and Operation and Financial See Focus Engagement Conduct Excellence outcome Impact • Strong performance across all • Operational efficiencies from digital revenue lines transformation • Increased shareholder return • Navigated market challenges to deliver • Focu
Slide 36: Looking Ahead - 2023 Focus Areas
LOOKING AHEAD - 2023 FOCUS AREAS 1 2 Efficiency: 3 Risk Growth & scale: Leveraging management: Driven by focus on digital Proactive and client needs investments data driven risk for efficient analysis and client service management To be a leading financial services 4 Regional play: 5 Future Ready organis
Slide 37: Disclaimer
DISCLAIMER This presentation has been prepared for information purposes only and is not and does not form part of any offer for sale or solicitation of any offer to subscribe for or purchase or sell any securities nor shall it or any part of it form the basis of or be relied on in connection with any
Slide 38: Thank You
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