Post on 22-Aug-2020
SBM HOLDINGS LTD
8th Annual Meeting
28 June 2018
This document has been prepared by SBM Group (SBM Holdings Ltd and itssubsidiaries) (the Group) for general circulation and is meant solely for informationpurpose, without taking into consideration any objective or aim of whoever isreceiving this document. SBM Group does not, in any way whatsoever, warrantexpressly or impliedly the accuracy and completeness of the contents of thispublication and shall not be liable for any loss or damage (including, withoutlimitation, damages for loss of business or loss of profits) or prejudice of any naturewhatsoever, arising in contract, tort or otherwise suffered by any person / entityrelying on the information contained in this document or arising from anyshortcoming, mistake, omission, defect or inaccuracy, in the document arisingthrough inadvertence or any other reason. This document is owned by SBM Groupand no part of this publication may be reproduced or transmitted in any form orby any means, including photocopying and recording, or by any informationstorage and retrieval system without the permission of the organization.
DISCLAIMER
2
ABOUT SBM GROUP
• Established in 1973, SBM has a strong franchise in Mauritius, and a
growing regional presence
• Listed on the Stock Exchange of Mauritius (SEM) since 30 June
1995. Currently 3rd largest on SEM with a Market capitalisation of
MUR23.3 billion as at 31 May 2018
• Total assets of MUR 202 billion as at March 2018
• Engaged in banking, non-banking financial services and
non-financial investments
• Among top 1000 banks in the world
• Moody’s Rating for SBM Bank (Mauritius) Ltd: Baa3/P-3 (Stable Outlook)
Strong Group Fundamentals
5
Group Structure
6
Our Presence
67
Best Retail Banking
Mauritius 2017
Best e-Commerce
Bank Mauritius
2017
Best Retail Bank
Mauritius 2017
SBM Securities Ltd:
Best Stockbroker –
Indian Ocean 2017
Regional Bank of the Year –
Southern Africa
Best Investment Bank &
Best Innovation in Retail Banking
Mauritius 2018
Recognition at Different Levels
8
FINANCIAL HIGHLIGHTS
-
500
1,000
1,500
2,000
2,500
3,000
Dec 15Dec 16
Dec 17
1,608
2,309 2,575
Profit after tax
MUR Million
6
Group Profit for December 2017 increased…
10
2,309
384
741 647
321
78 90 95
2,575
+8.8%
+35.9% +23.6%
+10.3%-14.0%
1,000
1,500
2,000
2,500
3,000
3,500
PAT Dec
16
Net
interest
income
Non
interest
income
Non
interest
expenses
Portfolio
Charge
Specific
Prov &
Write offs
Share of
profit of
associate
Tax PAT Dec
17
MUR Million
+11.5%
… Mainly due to growth in Net Interest Income and Non Interest Income, tempered by a significant rise in operating expenses and portfolio provisions
11
80% 77%
16% 25%
1%3%
0%
-5%
2%3%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
2016 2017
SBM Holdings Ltd SBM (NFC) Holdings Ltd
SBM (NBFC) Holdings Ltd SBM (Bank) Holdings Ltd-Seg B (Incl overseas)
SBM (Bank) Holdings Ltd-Segment A
MUR 2,309 mMUR 2,575 m
Domestic Banking remains the main pillar of the Group, but the contribution from Cross Border has picked up
12
PROFIT AFTER TAX
%
1.23 1.63 1.51
7.26
10.04 10.52
-
2
4
6
8
10
12
Dec-15 Dec-16 Dec-17
Return on Assets Return on Equity
7
ROE improved slightly, but ROA dropped
13
7
105.0
68.8
37.4
136.2
111.9
71.6
39.4
146.9 145.5
103.1
40.0
194.0
0
20
40
60
80
100
120
140
160
180
200
Total Deposits Net Loans &
Advances
Investment securities Total Assets
Dec-15 Dec-16 Dec-17
MUR Billion
Total Assets grew by 32% driven by higher Segment B assets
14
38%
44%
18%
Dec-15
37%
47%
16%
Dec-16
37%
40%
23%
Dec-17
11
MUR 104Bn MUR 109Bn MUR 145Bn
Deposit Mix remained well balanced and kept the growth momentum year on year
15
37%
44%
18%
2016
39%
44%
17%
2015
Mur 72Bn Mur 76Bn
31%
34%
35%
2017
Mur 107Bn
Gross Loans and Advances: volumes increased due to international/ Segment B advances
16
%MUR Million
Net Interest Income recorded growth on the back of the strong assets growth despite drop in NIM
17
4,253
4,383
4,768
3.223.10
2.81
2.00
2.50
3.00
3.50
4.00
3,800
4,000
4,200
4,400
4,600
4,800
5,000
2015 2016 2017
Net interest income Net interest margin
MUR Million
Non-Interest Income was supported by a large increase in gains from dealing in financial instruments coupled with higher fees & commission
18
1,029 1,053
1,240
527 512
1,077 287
456
464
160 43
23
-
500
1,000
1,500
2,000
2,500
3,000
2015 2016 2017
Other operating income
Net gain on sale of securities
Profit arising from forex and net gain from financial instruments
Net fee and commission income
2,0032,063
2,804
4,253 4,383 4,768
2,003 2,063
2,804
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Dec-15 Dec-16 Dec-17
Net Interest Income Non Interest Income
6,2556,446
7,572
MUR Million
16
Gross Operating Income grew by 17.5%
19
1,237 1,396
1,619
872
996
1,099 162
350
670
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Dec-15 Dec-16 Dec-17
Personnel Expenses Other Expenses Depreciation & Amortisation
16
MUR Million
Operating Expenses increased significantly amidst capacity building initiatives and the full year impact of new system implementation
20
2,271
2,742
3,388
%
36.30
42.53
44.75
30.00
32.00
34.00
36.00
38.00
40.00
42.00
44.00
46.00
48.00
50.00
Dec-15 Dec-16 Dec-17
17
… resulting in a rise in the Cost to Income Ratio
21
For the year ended December 2017, SBM Mauritius Ops and SBM Indian Ops booked write offs of MUR 1.3 Bn and MUR 296 M respectively out of existing provisions.
3,712
4,998 4,787
5.14%
6.60%
4.47%
1.87%
2.64%
1.98%
1.00%
3.00%
5.00%
7.00%
0
1,000
2,000
3,000
4,000
5,000
Dec-15 Dec-16 Dec-17
%
Impaired Advances Gross impaired / Gross Advances (%)
Net Impaired / Net Advances (%)
18
Both Gross Impairment Ratio and Net Impaired Ratio improved compared to 2016
22
MUR Million
18.25 18.60 20.01
5.46 5.43 5.10
28.26
25.70
19.98
10.00 10.38 11.13
5.00
10.00
15.00
20.00
25.00
30.00
-
5.00
10.00
15.00
20.00
25.00
30.00
Dec-15 Dec-16 Dec-17
%
Tier 1 Capital MUR Bn Tier 2 Capital MUR Bn
Capital adequacy ratio Minimum BOM Requirement (%)
19
Capital adequacy ratio remained well above regulatory requirements, albeit decreasing in line with strong advances growth
23
MUR Billion
Cents%
Dividend: maintained at same level as in 2016 since Group’s capital position remains sound
24
40.00 40.00 40.00
5.63
6.02
5.33
3.73
3.29
2.96
2.00
3.00
4.00
5.00
6.00
10.00
20.00
30.00
40.00
50.00
2015 2016 2017
Dividend per share (Cents) Dividend Yield (%)
Market Dividend Yield (%)
OUR STRATEGY
Strategic Focus Areas
26
Strategic Focus Areas (Cont’d)
27
Additional dedicated
SME desks in
branches
Market share:
Personal Banking
increased from
29.4% in Dec 16 to
30.8% in Dec 17
Market Share:
Corporate Banking
increased from
18.7% in Dec 16 to
20.2% in Dec 17
SME:
Partnership with FSA -
guarantee for bank
loans & resources
Launch SBM
Microfinance
Cross-selling initiative &
Customer referral model
Consolidation
28
Arranger
MUR 1.5 Bn Secured
Notes Programme –
for a local corporate
Investment
Banking
licence
July 2017
Raised USD 165 Mn
through depositary
receipts for
Afreximbank
Launch of
structured products
– leveraged notes,
capital protected
notes, Ghana Coco
Bond
SBM (Mauritius) Infrastructure
Development
Company Ltd– SPV raising
USD 500 Mn from AfreximBank
Africa Infrastructure
and Industrialisation
Fund, LP
Revamped Wealth
Management &
Asset Management
businesses
Total AUM – MUR 9.5 Bn
Diversification
29
� SBM Bank (Kenya) Ltd –
May 2017
� Initiated acquisition of
Chase Bank
Partnered with pan-
African financial
institutions –
Afreximbank/ FSA/ PTA
Bank
Opened 5th branchFirst Foreign Bank to
Obtain WOS Licence
Regionalisation
30
Licence to operate in
Seychelles
Upgraded
SBM Mobile
Banking App
Online Loan
Application
New Website
October 2017
eStatement
initiativeSignature Pad
Partnership with
AliPay:
A first in Mauritius
Upgraded
SBM Internet
Banking
Modernisation
31
Recruitment in
key positions &
appointment of
Group CEO
Streamlined
processes
Review of
HR Policies
Staff Engagement
Survey
Conversion to
Permanent Employment
& Job Evaluation
Launch of
SBM Training Centre
Capacity Building
32
SBM Staff Children Education Fund:
170 beneficiaries funded,
amounting to MUR 29 Mn
2,250 Scholarshipsawarded to date
Community & Employee Initiatives
33
Adopting Sustainable Practices
OUR FOCUS AREAS
Retail Banking
• Reduce cost to serve and improve customer
convenience through migration to digital channels
• Cross-selling to better address customer needs
• Improve customer service levels
Domestic Corporates and SMEs
• Sales process efficiency to grow market share
• Move up the value chain to meet client needs and raise
share of fee-based income
Our Focus Areas: Mauritius
36
International Banking
• Leverage international presence across selected countries
• Cross-selling across Group entities
Private Banking & Wealth Management
• Product and market diversification
Non-Banking Financial Services
• Product development and product scale
• Synergy with other entities of the Group
• Investment banking deals
Our Focus Areas: Mauritius (cont’d)
37
• Create customer value propositions to build a healthybook and gain market share with a respectable Indianlender status
• Exploit India/Mauritius/Kenya/Madagascar linkages togrow both funded and non-funded business
• Tap into synergistic opportunities with other entities ofthe Group through cross-selling
• Manage impaired assets and recovery from written-off/provisioned assets
Our Focus Areas: India
38
• Stabilisation and integration (subject to deal completion)
• Take advantage of the combined strength to grow business
in the target segments
• Tap into synergetic opportunities with other entities of
the Group
• Align policies to Group policies, particularly in areas of
risk and compliance
Our Focus Areas: Kenya
39
• Low-risk business focus
• Accompany Mauritian customers doing business in
Madagascar
• Cross-sell HNWIs and Corporates to Mauritius banking
and non-banking
Our Focus Areas: Madagascar
40
HR
• Improve capabilities in selected growth areas
• Enhance organisational culture
• Recruit, retain and reward top talent
Technology
• Pursue digitalisation agenda
• Manage IT costs and cost of change
• Optimise distribution channels
Our Focus Areas: Key Enablers
41
Organisation and Governance Framework
• Revamp group organisation and governance structure to
improve accountability and synergy
Risk Management
• Align risk appetite to strategy
• Improve risk culture and operational excellence
• End to end credit process review
Our Focus Areas: Key Enablers
42
THANK YOU