T2iB04846 Std Bank PPT 1 - The Vault Central and other (7) (3) 793 9 729 FY13 loans and advances to...
Transcript of T2iB04846 Std Bank PPT 1 - The Vault Central and other (7) (3) 793 9 729 FY13 loans and advances to...
Standard Bank Group Financial results presentation for the year ended 31 December 2013 1
Financial results presentation
for year ended 31 December 2013
Financial results
Notes
2 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
3 Financial results presentation for year ended 31 December 2013
Key metrics
FY13
change
% FY12
Headline earnings (Rm) 17 194 15 14 918
Headline EPS (HEPS) (cents) 1 064.9 14 934.9
Diluted HEPS (cents) 1 054.7 14 927.4
DPS (cents) 533 17 455
NAVPS (cents) 8 127 14 7 136
ROE (%) 14.1 14.0
Credit loss ratio (%) 1.04 1.08
Cost�to�income ratio (%) 58.5 58.9
Total capital adequacy ratio (%) 16.2 14.3*
Tier I capital adequacy ratio (%) 13.2 11.2*
* Pro forma B3
4 Financial results presentation for year ended 31 December 2013
Return on RWA improving
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
0
100
200
300
400
500
600
700
800
900
FY10 FY11 FY12 FY13 %
Closing RWA Average RWA Return on average RWA
Rbn
Standard Bank Group Financial results presentation for the year ended 31 December 2013 3
Notes
5 Financial results presentation for year ended 31 December 2013
Diversification
49%
38%
13%
Even and stable contribution to headline earnings from business units
PBB CIB Liberty
68%
26%
6%
Africa a meaningful contribution to group revenue
SBSA
Rest of Africa legal entities
Other legal entities
6 Financial results presentation for year ended 31 December 2013
Business unit view of headline earnings
FY13
Rm
change
%
FY12
Rm
Personal & Business Banking 8 358 14 7 343
South Africa 8 538 15 7 410
Rest of Africa (361) (73) (209)
Outside Africa 181 27 142
Corporate & Investment Banking 6 591 49 4 419
Central and other 34 (93) 493
Continuing operations 14 983 22 12 255
Argentina – Discontinued operations 673
Banking activities 14 983 16 12 928
Liberty 2 211 11 1 990
SBG 17 194 15 14 918
4 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
7 Financial results presentation for year ended 31 December 2013
Summarised group income statement
FY13
Rm
change
%
FY12
Rm
Net interest income 39 225 15 34 233
Non�interest revenue 36 669 6 34 474
Total income 75 894 10 68 707
Credit impairment charges 9 214 5 8 800
Income from operations 66 680 11 59 907
Operating expenses 44 862 10 40 826
Headline earnings – Continuing operations 14 983 22 12 255
Argentina – Discontinued operations 673
Headline earnings – banking activities 14 983 16 12 928
Headline earnings – Liberty 2 211 11 1 990
SBG headline earnings 17 194 15 14 918
8 Financial results presentation for year ended 31 December 2013
Summarised constant currency income statement
FY13
Rm
change
%
FY12
Rm
Net interest income 39 225 12 35 127
Non�interest revenue 36 669 2 35 971
Total income 75 894 7 71 098
Credit impairment charges 9 214 (0) 9 232
Income from operations 66 680 8 61 866
Operating expenses 44 862 4 43 127
Headline earnings – Continuing operations 14 983 29 11 609
Argentina – Discontinued operations 791
Headline earnings – banking activities 14 983 21 12 400
Headline earnings – Liberty 2 211 11 1 990
SBG headline earnings 17 194 19 14 390
Standard Bank Group Financial results presentation for the year ended 31 December 2013 5
Notes
9 Financial results presentation for year ended 31 December 2013
IFRS discontinued operations
FY13
Rm
change
%
FY12
Rm
Profit for the year from continuing operations 16 660 14 14 565
(Loss)/profit from discontinued operations (1 022) (>100) 817
Profit from discontinued operation – Argentina 910
Profit from disposal of discontinued operation – Argentina 1 525
Loss from discontinued operation – Global markets OA (419) 74 (1 618)
Held for sale impairment – Global markets OA (603)
Profit for the year 15 638 2 15 382
Headline earnings – banking activities 14 865 17 12 732
Headline earnings – Liberty 2 121 16 1 832
SBG headline earnings 16 986 17 14 564
10 Financial results presentation for year ended 31 December 2013
Loans and advances to customers
FY13
Rbn
change
%
FY12
Rbn
PBB 515 8 475
Mortgage loans 309 3 300
Instalment sale and
finance leases71 12 63
Card debtors 28 16 24
Other loans and advances 107 21 88
Inclusive banking in SA 3 (29) 4
Other personal unsecured
lending47 23 39
Business lending and
other57 24 45
CIB 285 11 257
Corporate loans 243 11 219
Commercial property
finance42 11 38
Central and other (7) (3)
793 9 729
FY13 loans and advances to customers
Mortgage loansInstalment sale and finance leasesCard debtorsPersonal unsecured lendingBusiness lending and otherCorporate loans
6 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
11 Financial results presentation for year ended 31 December 2013
Deposit and current accounts
FY13
Rbn
change
%
FY12
Rbn
Personal & Business
Banking515 12 461
Retail priced 298 20 248
Wholesale priced 217 2 213
Corporate & Investment
Banking499 7 467
Central and other (14) (3)
1 000 8 925
17% 9%20%
0
200
400
600
800
1 000
FY10 FY11 FY12 FY13
Other deposit and current accounts
Retail priced deposits
Rbn
12 Financial results presentation for year ended 31 December 2013
NII and Margin
27 028 29 027 34 233 39 225 0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
FY10 FY11 FY12 FY13
Net interest income
Rm
415 429
1510
3
11
5
380
390
400
410
420
430
440
FY12 Loanpricing
Fundingcost
Endow-ment
Mix Other FY13
Margin analysis
bps
Standard Bank Group Financial results presentation for the year ended 31 December 2013 7
Notes
13 Financial results presentation for year ended 31 December 2013
Non-interest revenue
17 883 19 782 21 319 23 147
8 0327 895
8 86810 202
2 8052 047
4 287
3 320
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
FY10 FY11 FY12 FY13
Net fee and commission revenue Trading revenue Other revenueRm
14 Financial results presentation for year ended 31 December 2013
Non-interest revenue
0
5 000
10 000
15 000
20 000
25 000
FY10 FY11 FY12 FY13
Net fee and commission revenue
Account transaction fees Electronic banking
Knowledge-based fees Card-based commission
Bancassurance Other incl fee expenses
Rm
Trading revenue
FY13
Rm
change
%
FY12
Rm
FIC 7 039 (3) 7 280
Commodities 1 984 28 1 553
Equities 1 179 >100 35
10 202 15 8 868
Other revenue
FY13
Rm
change
%
FY12
Rm
Banking and other 1 356 (40) 2 253
Property�related revenue 474 (29) 663
Insurance –
bancassurance income1 490 9 1 371
3 320 (23) 4 287
8 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
15 Financial results presentation for year ended 31 December 2013
Non-performing loans and coverage ratios
0
1
2
3
4
5
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
FY11 FY12 FY13
NPLs
Corporate loansBusiness and other lendingRetail unsecuredRetail securedNPL ratio
Rm %
FY13
%
FY12
%
FY11
%
PBB coverage ratio 44 38 30
Mortgage loans 28 26 20
Instalment sale and finance
leases51 49 57
Card debtors 71 65 73
Other loans and advances 68 73 66
CIB coverage ratio 65 49 31
Corporate loans 70 51 31
Commercial property
finance28 24 22
Total coverage ratio 48 41 30
16 Financial results presentation for year ended 31 December 2013
Credit impairment charges
11 719 7 394 6 436 8 800 9 2140
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
FY09 FY10 FY11 FY12 FY13
Credit impairment charges Credit loss ratio
Rm %
Standard Bank Group Financial results presentation for the year ended 31 December 2013 9
Notes
17 Financial results presentation for year ended 31 December 2013
PBB credit impairment charges
Credit impairment
chargesCredit loss ratios
FY13
Rm
FY12
Rm
FY13
%
FY12
%
Mortgage loans 2 411 2 648 0.79 0.91
Instalment sale and finance leases 789 490 1.18 0.85
Card debtors 840 384 3.26 1.73
Other loans and advances 3 777 3 136 2.83 2.92
Personal unsecured lending 2 726 2 304 5.73 6.47
Business lending and other 1 051 832 1.22 1.16
PBB 7 817 6 658 1.47 1.39
South Africa 6 554 5 553 1.45 1.33
Rest of Africa 1 261 1 108 2.92 3.33
18 Financial results presentation for year ended 31 December 2013
CIB credit impairment charges
Client location
FY13
Rm
change
%
FY12
Rm
South Africa 340 67 204
Rest of Africa 415 (37) 661
Outside Africa 797 (45) 1 455
Specific credit impairment charges 1 552 (33) 2 320
Portfolio impairments (155) 20
CIB credit impairment charges 1 397 (40) 2 340
Credit loss ratio 0.36 0.63
10 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
19 Financial results presentation for year ended 31 December 2013
Cost-to income ratio and jaws* analysis
( 5)
5 18 11 712 0 17 10 4
55
56
57
58
59
60
61
62
FY10 FY11 FY12 FY13 FY13 constantcurrency
(10)
(5)
0
5
10
15
20
Total income growthTotal cost growthCost-to-income ratio (RHS)Cost-to-income ratio excluding Global Markets OA (RHS)
% %
* Difference between income growth and cost growth
20 Financial results presentation for year ended 31 December 2013
Staff costs and operating expenses
• Total IT function spend including staff costs increased 15%
• Information technology line increased by outsourcing activity, but savings realised in other
expense lines
FY13
Rm
change
%
FY12
Rm
Staff costs 24 760 11 22 265
Other operating expenses 20 102 13 17 803
Information technology 4 456 23 3 636
Depreciation and amortisation 3 587 15 3 121
Impairment of intangible assets 308 40 220
Communication 1 463 4 1 403
Premises 3 335 6 3 133
Professional fees 1 742 (18) 2 114
Other 5 211 25 4 176
Restructure charge 758
Total banking activities 44 862 10 40 826
Constant currency 44 862 4 43 127
Standard Bank Group Financial results presentation for the year ended 31 December 2013 11
Notes
21 Financial results presentation for year ended 31 December 2013
11.2 13.2
0.9
1.2
0.2 0.1 0.6
0.7
0.1
10.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
FY12 proforma B3
Retainedincome
RefinancingBEE deal
Regulatoryapproved
modelchanges
Operationaldecrease in
RWA
Impact ofFx on RWA
Impact ofFx on NAV
(FCTR)
Other FY13
%
Progression of Tier 1 capital adequacy ratio
22 Financial results presentation for year ended 31 December 2013
790 842 8415
6
7
8
9
10
11
12
13
14
15
16
17
300
400
500
600
700
800
900
FY12 Basel 2.5 FY12 pro forma Basel 3 FY13
Risk-weighted assets Total capital adequacy ratio
Tier 1 capital adequacy ratio Common equity tier 1 capital adequacy ratio
Rbn %
Capital ratios and risk-weighted assets
12 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
23 Financial results presentation for year ended 31 December 2013
Dividends
386 386 425 455 5330
0.5
1
1.5
2
2.5
0
100
200
300
400
500
600
FY09 FY10 FY11 FY12 FY13
DPS Dividend cover ratio
cps times
Corporate & Investment
Banking
Standard Bank Group Financial results presentation for the year ended 31 December 2013 13
Notes
25 Financial results presentation for year ended 31 December 2013
CIB summarised income statement
FY13
Rm
change
%
FY12
Rm
Total income 28 304 9 25 927
Credit impairments 1 397 (40) 2 340
Income from operations 26 907 14 23 587
Operating expenses 17 537 8 16 184
Restructure charge 758
Net income before tax 9 466 43 6 630
Headline earnings 6 591 49 4 419
ROE (%) 14.3 9.6
Credit loss ratio (%) 0.36 0.63
Cost�to�income ratio (%) 61.8 65.3
26 Financial results presentation for year ended 31 December 2013
CIB income
36%35%
36%37%
0
5 000
10 000
15 000
20 000
25 000
30 000
FY10 FY11 FY12 FY13
Non trading revenue Trading revenueRm
14 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
27 Financial results presentation for year ended 31 December 2013
CIB business units
Total income Headline earnings
FY13
Rm
change
%
FY12
Rm
FY13
Rm
change
%
FY12
Rm
Transactional Products and Services 8 884 19 7 455 2 212 29 1 712
Global Markets 11 934 16 10 301 2 403 96 1 225
Investment Banking 6 140 (7) 6 627 1 672 (6) 1 774
Real estate and Principal Investment
Management and curtailed operations1 346 (13) 1 544 304 24 246
28 304 9 25 927 6 591 33 4 957
Restructure charge (538)
CIB 28 304 9 25 927 6 591 49 4 419
28 Financial results presentation for year ended 31 December 2013
Opportunities and priorities
• Relentless focus on serving our clients in a challenging operating environment
– Focus on client engagement, execution and winning mandates
– Leverage product and geographic capability
– Optimise cross-selling opportunities
• Maintain financial performance momentum
– Positive trajectory in revenue growth on the African continent
– Strive for positive jaws by balancing investment with revenue growth
• RWA discipline
– We have a sustainable client franchise which generates ‘capital light’ TPS revenues
– Utilise capital in the most efficient way by originating and distributing African risk
– Drive ROE higher for shareholder value creation
• Work closely in partnership with ICBC to develop the Global Markets business in London
• Passionate and committed people
– Our people are the critical success factor in our efforts to strengthen and maintain excellent client service
– We offer interesting and rewarding careers to our people, and we are dedicated to their ongoing development
– In return we expect their commitment to a culture of high performance, honesty, transparency, teamwork and collaboration
Standard Bank Group Financial results presentation for the year ended 31 December 2013 15
Notes
Personal & Business
Banking
30 Financial results presentation for year ended 31 December 2013
PBB summarised income statement
FY13
Rm
change
%
FY12
Rm
Net interest income 27 558 17 23 458
Non�interest revenue 21 038 10 19 086
Total income 48 596 14 42 544
Credit impairment charges 7 817 17 6 658
Operating expenses 29 348 13 25 920
Headline earnings 8 358 14 7 343
Net interest margin (%) 5.06 4.79
Credit loss ratio (%) 1.47 1.39
Cost�to�income ratio (%) 60.0 60.1
ROE (%) 18.5 19.4
16 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
31 Financial results presentation for year ended 31 December 2013
PBB product reporting
Total income Headline earnings
FY13
Rm
change
%
FY12
RmFY13
Rm
change
%
FY12
Rm
Transactional products 20 703 8 19 188 2 727 (2) 2 789
Mortgage lending 6 243 21 5 161 1 516 57 966
Instalment sale and finance leases 2 954 15 2 565 181 (21) 229
Card products 5 070 13 4 472 1 334 11 1 199
Lending products 8 520 24 6 896 785 25 629
Bancassurance and wealth 5 106 20 4 262 1 815 19 1 531
PBB 48 596 14 42 544 8 358 14 7 343
32 Financial results presentation for year ended 31 December 2013
Key SA portfolios delivering good growth
Total income Headline earnings
FY13
Rm
change
%
FY12
Rm
FY13
Rm
change
%
FY12
Rm
Business Banking 11 218 11 10 135 3 658 11 3 304
Personal Markets 20 648 17 17 590 4 339 23 3 531
Inclusive Banking 3 862 (10) 4 283 (843) (37) (617)
Bancassurance and wealth 2 991 12 2 663 1 384 16 1 192
PBB SA 38 719 12 34 671 8 538 15 7 410
Standard Bank Group Financial results presentation for the year ended 31 December 2013 17
Notes
33 Financial results presentation for year ended 31 December 2013
Opportunities and priorities
• Deliver excellent customer experience
– We aspire to make a difference in the lives of our customers
– Offer customers convenience and allow them to choose how and when they bank
• The digital revolution is fundamentally changing the way in which consumers and businesses interact
– Smart mobile devices will become our most crucial customer interaction
– Simplify technology and standardise processes to remain efficient and agile enough to meet our customers’ needs
– Deliver integrated channels and world class efficient technology
• A truly digital bank requires a new engine and IT capabilities
• New digital channels and products to support the demands of our customers and clients
– Therefore we are investing in IT to renew our core banking systems
• Strong focus on cost control
– Increasing pressure on NIR
– Amortisation of IT assets will increase over the next 3 years as new systems are “switched on”
Liberty
18 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
35 Financial results presentation for year ended 31 December 2013
Liberty delivered an excellent result
• BEE normalised ROE 23.3%
• Return on BEE normalised group equity value 16%
• Long-term insurance indexed new business up 15%
• Value of long-term insurance new business up 21%
• Customer net cash inflows R22bn
• Retail long-term insurance new business margin 2.4%
• CAR cover 2.6 times
• Strong South African franchises supported by innovative products, multi-distribution
capabilities and risk management
• Profitable bancassurance arrangement enhancing penetration
• Investments made are delivering value
• Strong capital position
36 Financial results presentation for year ended 31 December 2013
Earnings performance
FY13
Rm
change
%
FY12
Rm
Retail Insurance SA 1 467 24 1 179
Liberty Corporate 121 83 66
LibFin 2 015 (5) 2 116
Stanlib 633 18 537
Liberty Properties 44 (8) 48
Liberty Africa 52 >100 21
Liberty Health (40) 5 (42)
Other (216) 9 (237)
Headline earnings 4 076 11 3 688
SBG share of headline earnings (54%) 2 211 11 1 990
Standard Bank Group Financial results presentation for the year ended 31 December 2013 19
Notes
37 Financial results presentation for year ended 31 December 2013
Opportunities and priorities
• Maximise bancassurance, wealth and asset management synergies in SA
• Leverage
– Standard Bank network and Liberty’s products and expertise to compete in the fast-growing African
markets
• Capture affluent and aspirational middle market retail growth in insurance and investments
• Capture growth in asset management fund flows from international flows into SSA
– Insurance balance sheet and asset management competency in new regulatory environment
Conclusion
20 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
39 Financial results presentation for year ended 31 December 2013
Group in good shape
• FY13 results are sound
• Headline earnings increased 15% to R17.2bn
• Total revenue up 10% and total costs up 10%
– On a constant currency basis revenue up 7% and costs up 4% resulting in positive jaws of 3%
• Credit loss and cost-to-income ratios have both improved slightly
• Strong Tier 1 capital adequacy ratio to enable growth
– From 11.8% at FY12 on B2 basis to 13.2% at FY13 on B3 basis
• Excellent performance from the Rest of Africa legal entities
– Headline earnings growth of 44%
– ROE up from 16.6% to 19.7%
40 Financial results presentation for year ended 31 December 2013
We have returned to trend performance…
0
2
4
6
8
10
12
14
16
18
20
0
10
20
30
40
50
60
70
80
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 RbnRbn
Total income Headline earnings (RHS)
Total income
CAGR 13%
Headline
earnings
CAGR 12%
Standard Bank Group Financial results presentation for the year ended 31 December 2013 21
Notes
41 Financial results presentation for year ended 31 December 2013
… but improving ROE is our primary aim
91 103 115 1310
2
4
6
8
10
12
14
16
0
20
40
60
80
100
120
140
FY10 FY11 FY12 FY13
NAV ROE
Rbn %
NAV
CAGR 13%
42 Financial results presentation for year ended 31 December 2013
Strategy
• Our strategy is unchanged
• We aim to build the leading Africa-focused financial services organisation using all our
competitive advantages to the full
– We have simplified our business
– We have narrowed our focus to the African continent
– We are well positioned for organic growth
• To deliver on our strategy
– We carefully consider the levers we have to accelerate earnings growth and improve ROE
• Efficient capital allocation
• Productivity and costs and revenues per employee
– We think in decades and try to deliver every year
• We aim to provide investors with short-term value and a robust plan to ensure future value
22 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes
43 Financial results presentation for year ended 31 December 2013
Rest of Africa has grown consistently as a % of group income…
17%
FY10Total income
Rest of Africa legal entities
26%
FY13Total income
Rest of Africa legal entities
44 Financial results presentation for year ended 31 December 2013
… as we focus on growing our balance sheet on the African continent
12%
FY10NAV
Rest of Africa legal entities
16%
FY13NAV
Rest of Africa legal entities
Standard Bank Group Financial results presentation for the year ended 31 December 2013 23
Notes
45 Financial results presentation for year ended 31 December 2013
Conclusion
• We have a clear plan for what needs to be done over the next few years
– Simplified organisation focused on Africa with reduced management stretch
– Rest of Africa providing a meaningful and growing contribution the group
– Focus on growing and strengthening our franchise in South Africa continues
• We are confident in our strategy
• Our relationship with ICBC continues to strengthen
• We are working hard to deliver an improvement in returns both in the short and over the
longer term
– Medium-term ROE target of 15 – 18%
– Medium-term Tier 1 CAR target of 10.5 – 12.5%
24 Standard Bank Group Financial results presentation for the year ended 31 December 2013
Notes