personal & business banking sa analyst day - the vault making the most of challenging times to...
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1
Personal & Business Banking SA – Analyst day
18 August 2008
2
Agenda
● Economic outlook
● Financial Highlights
● Strategy of PBB
● Looking ahead
● Questions
Start one-on-one meetings
2
3
Macro economic environment in SA in 2008
● GDP ?
● Inflation ?
● Interest rates ?
● Food and fuel price ?
● Steady formal sector labour market ?
4
Trading conditions in SA
012345678910
Mar
-08
Dec
-07
Sep
-07
Jun-
07M
ar-0
7D
ec-0
6S
ep-0
6Ju
n-06
Mar
-06
Dec
-05
Sep
-05
Jun-
05M
ar-0
5D
ec-0
4S
ep-0
4Ju
n-04
Mar
-04
Dec
-03
Sep
-03
Jun-
03M
ar-0
3D
ec-0
2S
ep-0
2Ju
n-02
Mar
-02
02468
101214161820
Spending by households Disposable income of householdsFixed investment spending (RHS)
% yoy
% yoy
3
5
-6
-4
-2
0
2
4
6
8
10
12
14
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
%y/y
SA retail sales
In June 2008, retail sales fell by 2.6%y/y in real terms. Retail sales declining noticeably
6
14000
16000
18000
20000
22000
24000
26000
28000
30000
32000
34000
36000
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Rm, constant 2000 prices
SA retail sales (seasonal cycle)
Retail sales are extremely seasonal
4
7
-45
-35
-25
-15
-5
5
15
25
35
45
55
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
12-month moving average
%y/y
SA passenger vehicle sales
Passenger vehicle sales declined by 19% y/y in July
8
Standard Bank - median property prices
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
Jan-0
0
May-00
Sep-00
Jan-0
1
May-01
Sep-01
Jan-0
2
May-02
Sep-02
Jan-0
3
May-03
Sep-03
Jan-0
4
May-04
Sep-04
Jan-0
5
May-05
Sep-05
Jan-0
6
May-06
Sep-06
Jan-0
7
May-07
Sep-07
Jan-0
8
May-08%
5
9
Challenges foreseen in South Africa
● Consumer affordability
● Pressure on pricing of term funding
● Competition Commission
● Legacy Banking Systems
10
Financial highlights
17 029
25 415
299 959
2 472
11 066
June 2007
10
3
17
(7)
20
Change %
18 23118 768 Ave ordinary shareholders equity
26 37826 072Number of Employees
332 758352 052Total assets Rm
5 2692 300Headline earnings Rm
23 733 13 274Total income Rm
Dec 2007June 2008
6
11
Moderate levels of customer activity
● Retail sales down 4% y/y in May
● Value of new HL business registered down 28%
● Value of new loans in motor book down 32%
● Number of current accounts up 10%
● Number of other transaction and savings accounts up 4%
● Branch based transaction volumes– Teller volumes up 3%– Enquiry volumes up 1%
● Call centre volumes up 4%
● Internet users up 19%
● Cash growth up 14%
● ATM volumes down 2%
12
Current structure
Jacko MareeChief Executive
SBG
Bob Tucker
Customer Strategy
Leon BarnardProducts
Peter Wharton-Hood
Chief Operating OfficerSBG
Darrel OrsmondBusiness
Architecture
Peter Schlebusch
CEPBB SBSA
LincolnMali
Customer Channels
David Munro
CECIB SBSA
Sim TshabalalaChief Executive
SBSA
Johan van SchalkwykBusiness
Operations
Wally Fisher
HR
FunekaNtombelaPBB CFO
Terry Moodley& Keith Fuller
Credit
Rob Katz Bancassurance
Richard IrvineGlobal Chief Operating
Officer
7
13
Strategy
● Service
● Engaging people
● Focus on Transactional and savings accounts
● Employ suitable pricing and margin management strategies
● Sensible cost management
14
Inspired. Motivated. Involved people
● Successful in talent retention and continued positive progress on transformation targets
● Maintained investment in key IT initiatives
● Continued progress in bedding down Basel II related processes
● Successful graduate development programmes
● Focus on learning and development for staff
● Continue with Global Leadership programmes
8
15
Sensible cost management
● Total costs increased below inflation● Staff costs up 6%
– Managerial appointments effectively halted – January– Complete freeze on external recruitment – April– Active management of temporary workforce and labour broker– Robust management of poor performance
● Other operating expenses up 6%– Some cost pressures have increased
• Infrastructure and premises • Operational risk losses • ATM bombings• Alternative power supplies• Industrial action
● Cost-to-income ratio below 45% for 1H08
16
Outlook
● Significant forecast risk currently exists
● Inflationary pressures still evident
● High interest rates hurting
● Pressure on disposable income, discretionary spending
● Expected recovery in personal disposable income and discretionary spend only in Q4 2009
● Continued pressure on formal employment
● Positive growth in top end Business Banking
● Making the most of challenging times to optimally position PBB for growth in inevitably improving economic conditions
● Part of PBB Global with promising growth prospects in new markets e.g. Nigeria, Kenya and Argentina
9
17
Questions
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