KCB GROUP PLC INVESTOR PRESENTATION. Q FINANCIAL RESULTS

Transcription

1 KCB GROUP PLC INVESTOR PRESENTATION. Q FINANCIAL RESULTS

2 MACRO-ECONOMIC HIGHLIGHTS

3 Macro-Economic Highlights: Kenya KENYA 4.9% 5.3% GDP Growth Rate (%) 5.6% 5.8% 4.9% 6.3% 6.2% KENYA Q P 23.23% 12.60% 5.60% 9.62% 3.10% 6.60% 8.37% 7.70% 6.30% 7.80% 7.23% 6.88% 6.91% Agriculture Manufacturing Real estate Trade Education Transport & Storage Contribution to GDP Q2' % 5.43% 2.30% Financial & Insurance Q2'2018 Growth 6.10% 6.10% 3.50% 3.47% 1.82% 0.96% Construction ICT Health Mining & Quarrying Source: CBK, WB 3

4 Macro-Economic Highlights: Kenya Kenya Inflation 7.50% 7.06% 5.72% 5.70% 3.50% 4.83% 4.50% 4.18% 3.50% 3.60% 3.10% 3.90% 3.73% 3.60% 4.35% 4.00% 4.04% 4.70% 2.50% 2.70% Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Inflation rate Target Upper Target Lower Non Food Non Fuel

5 Macro-Economic Highlights: Kenya USD/KES Exchange Rate Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Interest Rate Evolution (%) Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Sources: CBK, KNBS 91 day T bill Average lending rates CBR Rate 5

6 Macro-Economic Highlights: Kenya Current Account Balance (% of GDP) -6.7% -5.2% -6.2% -5.4% -10.4% F 2018 F 12 Month Private Sector Credit Growth 3.9% 4.3% 4.3% 4.3% 1.7% 2.0% 2.7% 2.4% 2.7% 2.1% 2.0% 2.8% Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Source: CBK 6

7 Macro-Economic Highlights: Regional 5.40% GDP 10.60% 9.60% 8.50% 7.00% 7.35% 6.90% 6.40% Inflation 18.0% 13.1% 182.0% 0.10% Uganda Tanzania Rwanda Burundi Ethiopia 5.4% 5.8% 3.3% 3.4% 7.1% 2.1% 4.6% 8.1% 65.4% % Q Tanzania Uganda Rwanda Burundi Ethiopia 2017 Q Q Q South Sudan 91 Day T-Bills 15.0% 15.0% Exchange Rates to USD 10.1% 3,638 3, % 6.4% 5.2% 3.8% 4.0% 3.0% Tanzania Uganda Rwanda Burundi South Sudan 2017 Q Q Q ,261 2,239 1,748 1, Tanzania Uganda Rwanda Burundi Ethiopia* South Sudan Q FY2017 Q Q Q

8 THE GROUP

9 Our Philosophy Our Purpose Our Promise Simplifying your world to enable your progress Go Ahead Strategic Enablers Excellence in Customer Experience NPS > 60% Digital Financial Services NFI > 40% Strong Shareholder Value ROE > 21% Growth in Youth and Women Enterprises Outstanding Employee Engagement CIR > 45% Excellent Operations Performance 85% Satisfaction

10 Assets: Kshs 684 Bn KCB Group An Overview Access to East African Banking Network, Presence in 7 Countries Deposits: Kshs 527 Bn CAGR: 7.3% Advances: Rwanda 3% Tanzania 3% Kenya 92% Others 2% Market Capitalization (Sept 18): 1,214.3 USD m Listed in: NSE, DSE, USE and RSE CAGR: 7.3% Customers: 17M Total ATMs: 970 Total Branches: 257 Agents: 16,678 Staff: 6,189

11 Delivering Value to our Shareholders NAV (KShs) ROE > COE DIVIDEND/SHARE ROE COE % 24.0% % 22.2% 21.1% % 18.5% 18.8% 1.00 FY 15 FY 16 FY 17 Q3 18 FY 15 FY 16 FY 17 Q3 18 FY 15 FY 16 FY 17 Q3 18

12 OUR CHANNEL CONTRIBUTION

13 87% of transactions performed outside the branch SEPTEMBER 2017 SEPTEMBER 2018 Mobile 44% Agency, Internet and POS 26% Mobile 42% Agency, Internet and POS 33% ATMs 13% Branch Teller 17% ATMs 12% Branch Teller 13% Avg. Transactions / Teller per day 86 (14%) 73.6 Number of Branch Transactions (M) 14.6 (14%) 12.5 Q Q Q Q

14 Agency banking: 74% growth in volumes Volume of Transactions (KSHs. B) No. of Transactions (M) Ave.Trns /Agent (p.d) H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 18 Q3 18 H1 17 H1 18 Q3 17 Q % 62.4% Agency Transaction type 17.1% 14.8% 13.4% 13.4% 9.0% 8.2% 1.8% 0.9% 1.0% 0.4% CASH Deposit CASH Withdrawal School Fees Balance Enquiry Bill Payment Others* Sep-17 Sep-18 *Others: Account opening, mini statement, load cards and Funds transfer 14

15 Mobile banking: 34% growth in volumes 116 Volume of Transactions (KShs. B) Number of Transactions (M) Av. Transaction/ active customer/per month H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 17 Q % 49.9% Mobile Transaction Types 31.8% 23.6% 18.6% 16.5% 1.6% 1.7% B2C B2B C2B LIPA KARO Sep-17 Sep-18 15

16 16% growth in the average value per POS transaction Volume of Transactions (Kshs B) POS Revenue H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 17 Q

17 36% growth in ATM volumes Performance Volume of Transactions (KShs. B) 117 Ave.Trns'/ATM p.m Number of Transactions (M) H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 17 Q3 18 H1 17 H1 18 Q3 17 Q

18 Over KShs 2.2B in revenue from non-branch channels KShs: M Q Q Mobile Merchant POS Agency ATMs Internet 18

19 Non-Funded Income Mix KShs: M 16,930 17,334 17,484 17,942 4,638 4,083 14,769 2,290 2,621 3,252 3,632 3,685 3,212 2,927 2,146 3,530 3,159 2,126 2,042 1,869 7,038 8,178 7,080 8,073 8,879 Q3 14 Q3 15 Q3 16 Q3 17 Q3 18 Other Fees & Commission Lending Fees Exchange Income Other Income 19

20 OUR FINANCIALS

21 Stable strategy delivers 6% balance sheet growth KShs Billions KCB Group Fixed assets Other assets Balances with other institutions Q Q Cash and balances with central bank Investments in Government & Other securities Net loans and advances* KShs Billions KCB Bank Fixed assets Balances with other institutions Other assets Q Q Cash and balances with central bank Investments in Government & Other securities Net loans and advances* 21

22 Diversified loan portfolio Sectoral loan book comparison 25.6% 0.5% 0.3% 3.6% 2.8% 5.2% 3.8% 2.5% 3.2% 6.8% 4.7% 3.5% 5.3% 19.0% 8.2% 4.8% 8.6% 12.8% 10.6% 15.8% Industry Mar 2018 KCB Sep % 35.5% Mining and Quarrying Agriculture Energy and water Tourism, restaurants and hotels Transport and communication Financial Services Trade Building and construction Manufacturing Real estate Personal/Household * Group gross loans KShs.B % LCY FCY % Sep-17 Retail Corporate Mortgage Sep-18 22

23 NPL Migration 9.9% 7.9% 11.8% 12.0% 12.7% 10.7% 10.6% 9.8% 8.0% 8.5% 8.4% 7.5% 1.0% 1.0% 1.4% 0.6% 0.4% 0.6% Q Q Q Q Q Industry NPL (Kenya) CoR NPL KCB Group 7.8% 7.4% 7.8% 7.5% 14.8% 11.0% 11.6% 9.6% 16.4% 16.3% 15.2% 14.3% 3.3% 3.2% 3.2% 2.4% CHECK OFF MORTGAGE CORPORATE SME & MICRO Q Q Q Q

24 Sustained Improvement in coverage 40, % 35,000 30, % 80.1% 76.0% 31, % 82.7% 34,731 34, % 80.0% 25, % 24, % 20,000 15,000 18, % 38.9% 41.5% 40.0% 10, % 5,000 - Q3 14 Q3 15 Q3 16 Q3 17 Q3 18 Gross NPL Regulatory Coverage Ratio IFRS Coverage Ratio 0.0% 24

25 Deposit growth driven by KCB Bank Kenya KShs Billions KCB Group Plc Balances due to other banks Other liabilities Long-term debt Shareholders Equity Customer Deposits Q Q KShs Billions KCB Bank Kenya Balances due to other banks Other liabilities Long-term debt Shareholders Equity Customer Deposits Q Q

26 Balanced deposit mix 2% 3% 3% 3% 55% 47% 46% 46% 42% 50% 51% 51% Q Corporate Retail Other Currency Mix Deposits by Type Q % Deposits by Type Q % 11% 23% 26% 89% 5% 66% 5% 61% LCY FCY Demand Savings Term Call 26

27 Strong capital position Group 17.4% Core Capital to RWA 15.4% 15.1% 15.7% 16.3% Group 18.7% Total Capital to RWA 17.2% 16.6% 17.8% 15.3% 14.5% 14.5% 14.5% 14.5% 14.5% 10.5% 10.5% 10.5% 10.5% 10.5% Q Q H Q Kenya 13.6% 14.9% 15.0% 14.8% 15.0% 10.5% 10.5% 10.5% 10.5% 10.5% Q Q H Q Kenya 16.5% 16.1% 15.0% 16.4% 16.5% 14.5% 14.5% 14.5% 14.5% 14.5% Q Q H Q Q Q H Q

28 KShs Billions Stable strategy delivers 6% balance sheet growth Actual Q KCB Group Actual Q Y-O-Y Change KCB Bank Kenya Actual Actual Q Q Y-O-Y Change Cash and balances with central bank (7%) (6%) Balances with other institutions (7%) % Investments in Government & Other securities % % Net loans and advances % % Fixed assets % % Other assets % % Total Assets % % Customer Deposits % % Balances due to other banks (18%) (53%) Other liabilities % % Long-term debt % % Total Liabilities % % Shareholders Equity % % Statutory loan loss reserve (94%) (100%) Total Liabilities and Equity % % 28

29 20% Growth in Earnings KCB Group KCB Bank Kenya KShs Billions Actual Q Actual Q Y-O-Y Change Actual Q Actual Q Y-O-Y Change Interest Income % % Interest Expense (11.1) (12.9) 16% (9.1) (11.1) 22% Net interest income % % Foreign exchange income % (7%) Net fees and commissions (2%) % Other income % % Total other operating income % % Total other operating expenses (27.6) (26.8) (3%) (21.2) (21.0) (1%) Provisions for bad debts (3.1) (1.8) (43%) (2.7) (1.7) (36%) Profit before tax % % Tax (7.3) (7.6) 3% (6.5) (6.9) 6% Profit after tax % % 29

30 33% growth in International Business PBT KShs. M Net loans & Advances PBT KCB Bank South Sudan (62%) KCB Bank Burundi KCB Bank Uganda KCB Bank Rwanda 1,734 6,288 11,930 1,918 5,610 12, % 105% 21% 61% growth in PBT for International Businesses, excluding KCB South Sudan KCB Bank Tanzania Q Q ,313 14, % 30

31 Overview of Key Financial Ratios Q3 17 FY17 H1 18 KENYA GROUP 20.1% 19.5% 23.5% Return on Average Equity 25.8% 22.8% 51.9% 46.2% 48.2% Cost to Income 45.1% 49.7% 8.0% 8.5% 8.4% Gross NPL to Gross Loans 7.5% 7.5% 75.9% 75.4% 75.0% NPL Coverage 69.7% 82.7% 14.0% 14.0% 20.9% Debt to Equity 19.8% 19.7% 32.9% 32.2% 32.3% Non funded income to total income 29.2% 33.3% 2.9% 3.0% 3.0% Cost of funds 3.2% 3.2% 8.6% 8.9% 8.3% Net Interest Margin 8.1% 8.0% 1.0% 1.5% 0.4% Cost of risk 0.6% 0.5% 87.4% 85.1% 85.5% Loan to Deposit Ratio 89.9% 88.0% 15% 10% 4% Growth of Net Loans and Advances 3% 4% 16% 11% 9% Growth of Customer Deposits 8% 6% 31

32 Thank you. Investor Relations