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