Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Financial results presentation
For the year ended 31 December 2013
1
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Contents
• Operating environment
• 2013 results analysis
• Business segment performance review
• 2014: Prospects and outlook
• Q & A
• Appendix
2
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Operating environment
Sola David-Borha
Chief executive
3
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Operating environment
Domestic economy:
• GDP grew by 6.8% (2012: 6.6%), driven by
non-oil sector;
• Sustained single digit inflation rate throughout
2013. Headline inflation closed at 8.0%;
Averaged 8.5% in 2013;
• Exchange rate remained relatively stable
trading between N155-N160/$1;
• Significant growth in the capital market. NSE
ASI appreciated by 47.2%; and
• Successful privatisation of the power sector
and hand over of assets to new investors.
Banking industry:
• Slower growth in private sector credit and
continued competition for good quality risk
assets;
• Tightening monetary policy stance maintained
throughout 2013
• as cash reserve ratio on public sector
deposits increased to 50%;
• Relatively high interest rates;
• Cashlite initiative - Reduction in transactional
fees.
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
146.00
148.00
150.00
152.00
154.00
156.00
158.00
160.00
162.00
164.00
2010 2011 2012 2013
Average interbank exchange rate 12 month average Inflation rate
N/$ %
Exchange rate and Inflation rate
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2010 2011 2012 2013
Average interbank call rate Monetary policy rate
Average prime lending rate
%
Lending rate, Interbank call rate and MPR
4
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Operating environment
Results reflect progress on key initiatives:
• PBB – Grew customer numbers by >40% to
cross the one million mark (Workplace banking
initiative);
• Lowering cost of funding – Focus on improving
the deposit book mix between demand and
term.
• Rigour in credit recoveries and arrears
management leading to reduction in non-
performing loans;
• Cost containment – introduced a disciplined cost
focus
......while underlying core business continues to
perform:
• Wealth business grew assets under
management by 33% to cross the N1 trillion
mark.
• Differentiating capability in global markets team
– enables us to take advantage of market
opportunities.
• Investment banking records 26% growth in profit
before tax
Customer growth
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2010 2011 2012 2013
Number
Growth in assets under management and RSAs
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
2010 2011 2012 2013
Assets under management Retirement saving accounts
Nbillion Number (000)
5
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013 result analysis
Arthur Oginga
Chief financial officer
6
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Performance highlights
Significant growth in profitability driven by a well structured balance sheet
Income
statement
Gross earnings
Net interest income
Non-interest revenue
Total income
Profit before tax
Profit after tax
2013
N111.2 billion
N37.0 billion
N48.2 billion
N85.2 billion
N24.8 billion
N20.8 billion
2012
N91.9 billion
N33.6 billion
N33.9 billion
N67.4 billion
N11.7 billion
N10.2 billion
YoY change
Up 21%
Up 10%
Up 42%
Up 26%
Up 112%
Up 105%
Balance sheet
Gross loans &
advances
Deposit liabilities
Total assets
Shareholders’ funds
N303.3 billion
N416.4 billion
N763.0 billion
N94.3 billion
Up 9%
Up 17%
Up 13%
Up 13%
N279.5 billion
N355.4 billion
N676.8 billion
N83.3 billion
7
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Performance highlights
Selected Key
ratios
Net interest margin
Cost-to-income ratio
Credit loss ratio
Pre-tax return on average equity
After tax return on average equity
After-tax return on average assets
NPLs/total loans
Capital adequacy:
Group
Bank
Earnings per share
Price- to-book
2013
4.9%
68.0%
0.9%
27.7%
21.0%
2.9%
4.4%
24.5%
18.3%
186 kobo
2.2x
2012
5.0%
72.8%
2.5%
14.4%
10.9%
1.6%
5.1%
21.3%
16.3%
50 kobo
1.3x
8
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Balance sheet analysis
9
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Balance sheet reflecting steady progress
2013 2012 2011
Balance
sheet
Gross loans & advances 303,306 279,473 266,082
- PBB 133,550 105,055 93,067
- CIB 169,756 174,418 173,015
Customer deposits
416,352
355,419
287,242
- PBB
197,898
164,031 111,207
- CIB
218,454
191,388
176,035
Key
ratios
Loan to deposit (%)
72.8
78.6
92.6
Return on equity (%)
21.0
10.9
8.9
Capital adequacy(%)
24.5
21.3
22.9
• PBB risk assets grew 27% year-on-
year (YoY), driven by increase in
customer base and growing customer
relationships.
• CIB risk assets declined 3% (YoY), due
to the more challenging operating
environment in the last half of 2013,
coupled with year-end pay downs by
some clients.
• PBB liabilities increased by 21% on the
back of a continuous drive to increase
low cost deposits to ensure a steady
decline in the cost of funding.
• CIB liabilities grew 14% despite a
reduction in term deposits, reflecting
efforts to reduce dependence on
wholesale funding.
• Loan to deposit ratio continues to
improve as we balance loan and
deposit growth.
• Return on equity growing consistently
as profit after tax grew by more than
100%
10
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Total assets growth
Return on average assets Total assets mix
Cash and loans to banks
28%
Trading, derivatives and pledged assets
9%
Loans & advances to customers
38%
Financial investments
18%
Other assets 4%
Property & equipment and
intangible assets
3%
4.0%
2.1% 1.9%
3.4%
2.7%
1.4%
1.6%
2.9%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2010 2011 2012 2013
Pre-tax return on average assets After-tax return on average assets
389,644 554,507 676,819 763,046 -
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2010 2011 2012 2013
Change 2013 2012
% Nmillion Nmillion
Personal & Business
Banking 11
284,810
257,191
Corporate & Investment
Banking 13
455,664
402,597
Wealth 33
22,572
17,031
Total assets 13
763,046
676,819
Total assets by business units
Balance sheet reflecting steady progress
11
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Risk assets
185.0 266.1 279.5 303.3 -
50.0
100.0
150.0
200.0
250.0
300.0
350.0
2010 2011 2012 2013
Nbillion
Risk assets growth Risk assets by business units
Personal &
Banking Business
Corporate &
Investment
Banking Total
Nmillion Nmillion Nmillion
Overdrafts 18,577 14,949 33,526
Term loans 88,223 145,504 234,101
Installment sales and finance leases 18,084 9,303 27,012
Mortgage lending 8,667 - 8,667
Total loans and advances 133,550
169,756 303,306
Risk assets by sector
Agriculture 4%
Construction & real estate
5%
Electricity & other utilities
4%
Finance & Insurance
4%
Consumer credit 19%
Manufacturing 18%
Oil,gas & mining 18%
General commerce
23%
Transportation &
communication 4%
Government 1%
12
Risk assets by currency
FCY loans LCY loans Total loans
Nmillion Nmillion Nmillion
Personal & Business Banking 4,858 128,692 133,550
Mortgage - 8,667 8,667
Instalment sale & finance leases 1,515 16,569 18,084
Overdrafts 112 18,465 18,577
Term loans 3,232 84,991 88,223
Corporate & Investment Banking 97,425 72,331 169,756
Term loans 97,421 48,083 145,504
Overdrafts 4 14,945 14,949
Instalment sale and finance lease - 9,303 9,303
Total loans 102,283 201,023 303,306
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Risk assets performance
Non-performing loans and NPL ratio
12.8 16.6 14.3 13.4
7.0%
6.2%
5.1%
4.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2010 2011 2012 2013
Non-performing loans NPL/ total loans
Nmillion
Non-performing loans by business unit
Non-performing loans by sector
Agriculture 18%
Construction and real estate
15%
Consumer credit 21%
Manufacturing 10%
Oil,gas & mining 3%
General commerce
25%
Transportation & communication
8%
• Risk asset quality improved as NPLs declined by
7% to N13.4 billion in 2013 (2012: N14.3 billion)
despite the 9% growth in risk assets. This
improvement resulted in the decline in the ratio of
non-performing loans (NPL) to total loans (TL) to
4.4% from 5.1% recorded in 2012.
• PBB’s non-performing loans increased 15% to
N10.0 billion from N8.7 billion in FY 2012 as a
result of newly classified loans, although its ratio
of non-performing loans to total loans improved
to 7.5% from 8.2% recorded in 2012. CIB’s non-
performing loans declined 40% to N3.4 billion
from N5.7 billion in 2012, while the ratio of NPLs
to TLs improved to 2.0% from 3.3% recorded in
2012
Personal &
Banking
Business
Corporate &
Investment
Banking Total
Nmillion Nmillion Nmillion
Overdrafts 1,005 174
1,178
Term loans 6,377 2,958
9,335
Instalment sales and finance leases 2,195 280
2,475
Home loans 418 -
418
Total non-performing loans and
advances 9,995 3,412
13,407
13
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
• Customer deposits grew 17% to N416.4 billion in 2013,
on the back of an increased customer base as
customers confidence in the Stanbic IBTC brand
continues to grow.
• The deposit mix improved in 2013 as the ratio of low cost
deposit to total deposit increased to 52% from 43%
achieved in 2012. This improvement in deposit mix is a
result of a targeted sales drive aimed at increasing the
low cost deposits base and eventually reducing cost of
funds.
• PBB’s deposit book increased by N33.9 billion to N197.9
billion, representing a 21% growth and contributing 48%
of total deposit. While CIB’s deposit book grew 14% to
N218.5 billion
Growth in customer deposits
186.1 287.2 355.4 416.4 -
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2010 2011 2012 2013
Nbillion
Customer deposits
Growth in low cost deposits
Deposit liabilities by business unit
Change 2013 2012
% Nmillion Nmillion
Personal & Business Banking 21 197 898 164 031
Current deposits 28 98,550 76,793
Savings deposits 26 19,097 15,116
Call deposits >100 8,863 1,799
Term deposits 2 71,388 70,323
Corporate & Investment Banking 14 218,454 191,388
Current deposits 62 99,770 61,731
Call deposits >100 44,064 20,377
Term deposits (32) 74,620 109,280
Total deposits and current accounts 17 416,352 355,419
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013
14
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Income statement analysis
15
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Strong earnings growth
Gross earnings growth
56,745 63,377 91,860 111,226 -
20,000
40,000
60,000
80,000
100,000
120,000
2010 2011 2012 2013
N’million
Gross earnings quarterly
26,586 27,923 28,412 28,305 -
5,000
10,000
15,000
20,000
25,000
30,000
Q1 2013 Q2 2013 Q3 2013 Q4 2013
N’million
Gross earnings mix Gross earnings by business units
Interest based revenue
56%
Non-Interest interest based
revenue 44% Corporate &
Investment Banking
53%
Personal & Business Banking
30%
Wealth 17%
16
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Interest based revenue
18,981 27,642 33,554 37,013 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2010 2011 2012 2013
Nmillion
Net interest income Net interest income by business units
Corporate & Investment
Banking 45% Personal &
Business Banking
50%
Wealth 5%
Interest income mix • Net interest income was up 10% to N37.0 billion as a
result of a 8% growth in interest income supported by
growth in risk assets and 5% increase in interest
expense despite the growth in customer deposit.
• Growth in interest income was supported by a growing
loan book and increase in income from investment
securities due to favourable money market yields in
2013.
• Interest expense growth was driven by a 17% increase
in customer deposits. Cheaper and stable deposits
grew 54%, while expensive term deposits declined
19%.
• PBB contributed 50% of net interest income as the
business continues to focus on lending to individual
and small businesses.
59%
83% 76%
64%
30%
15% 23%
31%
11% 2% 1% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013
Loans and advances Investment securities Placements
17
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Non-interest based revenue
Non-interest revenue Non-interest revenue by business units
Non-interest revenue mix • Non-interest revenue grew 42% to N48.2 billion,
benefitting from increased transactional volumes and
activities as our customer base increases, growth in
assets under management in our wealth business,
closure of good advisory mandates within investment
banking and good trading book performance. Revenues
in our stock broking and custody businesses was
positively impacted by the good performance of the
capital market.
• Reduction in transactional fees by the regulator muted
the growth in fee and commission revenue.
• Trading revenue increased significantly as a result of a
well positioned trading book which took advantage of
interest rate movements and volatility in the foreign
exchange market
29,594 27,606 33,856 48,219 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
10,000
20,000
30,000
40,000
50,000
60,000
2010 2011 2012 2013
Non-interest revenue % of total income
Nmillion
Corporate & Investment
Banking 51% Personal &
Business Banking
14%
Wealth 35%
67% 63% 76%
68%
32% 35% 24%
31%
1% 2% 1% 1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013
Fees and commisions income Trading revenue Other revenue
18
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Revenue drivers
Net interest margin analysis
Cost of funds
2.0 2.2
5.4
4.9
-
1.0
2.0
3.0
4.0
5.0
6.0
2010 2011 2012 2013
%
2012 2013
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Net interest margin 5.0 6.3 5.9 4.1 3.8 4.8 4.2 5.2
Net interest margin - customer 3.1 4.4 4.1 1.9 1.9 2.2 1.7 2.3
6.5
7.1
3.6 3.4
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2013 2012
PBB CIB
%
Net interest margin by business units
19
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Credit impairments and credit loss ratio
Credit impairment charges
(2,167)
2,381
6,391
1,922 2,358
968 504 745
0.0
0.5
1.0
1.5
2.0
2.5
3.0
(3,000)
(2,000)
(1,000)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2010 2011 2012 2013
Credit impairment charge on non-performing loans
Credit impairment charge on performing loans
Credit loss ratio
Nmillion %
Movement in credit impairment charges
change 2013 2012
% Nmillion Nmillion
Specific credit impairment charges (64) 2,474 6,816
Provision for performing loans 48 745 504
Total impairment charges (56) 3,219 7,320
Recoveries 30 (552) (425)
Credit impairment charges (61) 2,667 6,895
Credit impairments charges by products
Mortgage lending -11%
instalment sales & finance leases 17%
Card 1%
Corporate lending
56%
Other loans and advance
15%
• Credit impairment charges declined 61% to N2.7
billion in 2013 (2012: N6.9 billion), due to the
resolution of some previously classified loans in our
retail banking business segment and recoveries made
on loans previously written off in our corporate
banking business.
• Provision for non-performing loans declined 64% as
customers in the business banking segment of our
PBB business recover from the effect of hike interest
rates in 2012.
• Credit loss ratio consequently improved to 0.9% from
2.5% recorded in 2012.
Mortgage lending
3%
Instalment sales & finance leases 17%
Corporate lending
48%
Other loans and advance
32%
2013
20
2012
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Operating expenses and taxation
• Operating expenses grew by 18% to N57.9 billion. The
growth is attributable to the increase in staff costs and
other operating expenses. Staff costs grew by 20% due to
inflation related salary increases, increase in sales staff
for customer acquisition and salary adjustment for non-
managerial staff, while other operating cost grew by 17%
due to increase in marketing and advertising expenses to
promote brand awareness and deposit insurance.
• Cost-to-income ratio improved from 72.8% in 2012 to
68.0% as revenue continue to grow faster than cost.
• Tax liability increased to N3.8 billion in 2013 due to a
higher taxable income. The tax computed based on
dividend paid in 2013 is higher than tax computed based
on taxable income.
Operating expenses and cost-to-income ratio
Staff costs 42%
Depreciation 7%
Other operating
costs 51%
Taxation and effective tax rate
34,476 41,792 49,103 57,948 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 2011 2012 2013
Operating expenses Cost-to -income ratio
Nmillion
4,073 3,463 1,568 3,844
26.1%
34.5%
13.4%
15.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2010 2011 2012 2013
Taxation Effective tax rate
Nmillion
21
Breakdown of operating expenses
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Funding and shareholder value
analysis
22
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
• The group’s deposits from customer accounted for 63% of
total liabilities and funded 55% of total assets, while equity
funded 13% of total assets. US$40 million Tier 2 capital was
raised during the year to support foreign currency lending
and working capital requirements.
• The group maintained a strong liquidity position throughout
the year with liquidity buffers held for potential stressed
conditions. Liquidity ratio closed at 89.1% in 2013 (2012:
49.8%), higher than the minimum statutory requirement of
30%.
• The group’s capitalisation remained healthy in 2013. Total
capital adequacy was 24.5% (2012: 21.3%) at the end of
year. The increase is attributable to the growth in profits and
Tier 2 capital raised during the year.
Funding mix
Funding, liquidity and capital
Liquidity ratio
Capital adequacy
53% 52% 53% 55%
4% 2% 4% 7%
12% 11%
13% 9% 8% 11% 8% 11%
10% 9% 10% 6%
13% 15% 13% 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013Equity Borrowings
Other liabilities Trading liabilities
Deposits from banks Deposits from customers
51.4
71.4
49.8
89.1
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2010 2011 2012 2013
Liqudity ratio Statutory minimum
%
31.4%
19.4% 20.7%
22.0%
32.2%
20.8% 21.3%
24.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
2010 2011 2012 2013
Tier 1 capital adequacy Total capital adequacy
Stanbic optimum capital target Statutory minimum
23
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
• Return on average equity after tax increased to 21.0% as
profits continue to grow despite the testing operating
environment.
• Increased shareholder confidence as evidenced by the
94% increase in share price and market capitalisation.
• Continued focus on improving shareholder value.
Average shareholders’ fund and return on equity
Shareholder value
Net assets value per share and price-to-book ratio
Market capitalisation
172.5 155.6
110.0
213.5
0
50
100
150
200
250
2010 2011 2012 2013
Nbillion
84,799 82,735 81,604 88,827
6.8% 10.6%
10.9%
21.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2010 2011 2012 2013
Shareholders' fund (average) ROaE (PAT) ROaE (PBT)
Nmillion %
464 436 857 976
2.0 1.9
1.3
2.2
0.0
0.5
1.0
1.5
2.0
2.5
0
200
400
600
800
1,000
1,200
2010 2011 2012 2013
Net asset value per share Price- to- book
kobo Times
24
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Shareholder value
25
Dividend per share and dividend cover
30 39
10
60
80
45 50 40
50
186
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
0
20
40
60
80
100
120
140
160
180
200
2009 2010 2011 2012* 2013
Dividend per share Earnings per share
Dividend cover
kobo Times Year ended Total amount
paid/proposed
Dividend paid per
share
Dividend type
N'million Kobo Interim/Final
31 Dec 2009 5,625 30 Final
31 Dec 2010 7,313 39 Final
31 Dec 2011 1,875 10 Final
31 Dec 2012* 8,500 60 Final
31 Dec 2013 8,000 80 Final
Dividend history
• Dividend paid in 2012 included 50k paid as special dividend during the share reconstruction to adopt the
holding company structure, while 10k was paid as final dividend for 2012.
• Paid interim dividend of 70k and proposed final dividend of 10k, amounting to 80k dividend for the year
ended 31 December 2013
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Business segment performance
review
26
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Corporate and Investment
Banking
Victor Williams
Executive Director
27
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
• Net interest income was up 23% to N16.6 billion,
on the back of a 9% reduction in interest expense.
The reduction in interest expense is as a result of a
successful strategy of increasing low cost deposits
while exiting expensive term funds.
Operating expenses grew 21% from N17.2 billion to
N20.8 billion in 2013. The increase was due to a
growth in incentives linked to stronger performance
and 6% increase in other operating costs. Despite
the increase in operating expenses, cost-to-income
ratio improved to 50.6% from 57.0% recorded in
2012.
Risk assets declined 3% to N169.8 billion due to a
more challenging environment in 2H13, distribution
of originated assets, and pay down of large
facilities by clients.
Deposits from customers grew 14% to N218.5
billion, as our transactional banking products and
services continued to yield strong results
2013: CIB financial analysis
Net interest income Breakdown of deposits Breakdown of risk assets
Current accounts
46%
Call deposits
20%
Term deposits
34%
Instalment sale and finance lease 5%
Overdrafts 9%
Term loans 86%
Operating expenses and cost-to-income ratio
12,566 14,272 13,496 16,622 -
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2010 2011 2012 2013
Nmillion
14,972 14,115 17,264 20,844 0%
10%
20%
30%
40%
50%
60%
-
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013
Operating expenses Cost-to-income ratio
Nmillion
28
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: CIB Non-interest revenue
Key drivers of fees and commissions
• Investment banking continues to contribute significantly
to fees and commissions revenue with solid transaction
volume in 2013 and a strong deal pipeline for 2014;
• Support from Standard Bank Group in executing
complex structured transactions;
• Growth in assets under custody supported by increased
capital market performance contributed positively to
fees and commissions revenue;
Trading revenue benefits from:
• Full product suite and structuring capability, and well-
managed risk appetite;
• Experienced and highly capable global markets team;
• Collaboration within Stanbic IBTC and with wider
Standard Bank Group; and
• Positive client sentiment despite thin margins - client
FX revenue increased 30% off a 23% increase in
volumes traded;
6,871 6,182 8,243 9,703
5,660 8,845
8,091
14,895
-
5,000
10,000
15,000
20,000
25,000
2010 2011 2012 2013
Trading revenue Net fee & commission revenue
Nmillion
4,887 3,924 4,037 2,047 -
1,000
2,000
3,000
4,000
5,000
Q1 2013 Q2 2013 Q3 2013 Q4 2013
Nmillion
Non-interest revenue Quarterly trading revenue analysis
29
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013 Achievements:
• The Most active Dealing Member Firm (Stockbroking) - The Nigerian Stock Exchange CEO Award 2013 ;
• M&A Deal of the Year - The Banker Awards (2013): for Tiger Brand’s acquisition of a 63 percent stake in Nigeria's
Dangote Flour Mills.;
• Best Custodian in Nigeria 2013 by Global Investor for the sixth year running;
• Best Foreign Exchange Provider in Africa and Nigeria – Global Finance Awards 2013;
• Best Investment Bank in Nigeria, EMEA Finance Banking Award, 2013 for the second year running;
• Sole Advisor for Danone's acquisition of 49% stake in Fan Milk International;
• Successfully advised UAC of Nigeria PLC’s acquisition of Portland Paints & Products Nigeria PLC.
• Adviser to AMCON on successful restructuring and redemption of AMCON’s bonds
2014 Focus:
• Continue to develop our client business by delivering a consistent top notch service and experience which will
enable us to maximise cross-selling opportunities and deliver optimal financial resource utilisation. ;
• Grow our lending business by taking advantage of Standard Bank Group’s balance sheet and expertise;
• Selective investments to improve our technology capabilities to serve our clients better; and
• Cost efficiency and improved operational performance to strengthen our capital ratios and returns.
2013: CIB Achievements and focus
30
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Personal & Business Banking
Obinnia Abajue
Executive Director
31
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: PBB financial analysis
Net interest income and Non-interest revenue Breakdown of deposits Breakdown of risk assets
Operating expenses and cost-to-income ratio
7,311
12,564
18,374 18,443
4,462 3,376
5,154
6,909
- 2,000 4,000 6,000 8,000
10,000 12,000 14,000 16,000 18,000 20,000
2010 2011 2012 2013
Net interest income Non-interest revenue
Nmillion
Current deposits
50%
Savings deposits
10%
Call deposits
4%
Term deposits
36%
Mortgage 7%
Instalment sale & finance leases 13%
Overdrafts 14%
Term loans 66%
• Net interest income remained flat year-on-year at
N18.4 billion, as a result of a 55% increase in
interest expense. The increase in interest expense
was due to the high volume of expensive term
deposits in the deposit book in the first half of 2013.
13% growth in interest income cushioned the effect
of the hike interest expense and improvement in
the deposit mix in the second half of 2013 also
reduced the interest expense.
• Non-interest revenue was up 34% to N6.9 billion,
as a result of increased transaction volumes and
activities supported by growing customer base and
enlarged delivery channels. High ATM and internet
banking uptime contributed positively to growth in
account transaction fees.
Operating expenses grew by 22% to N30.7 billion
due to marketing and advertising expenses to
launch new products. This worsened the cost-to-
income from 107% recorded in 2012 to 121%.
14,893 22,101 25,194 30,703 0%
25%
50%
75%
100%
125%
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2010 2011 2012 2013
Operating expenses Cost-to-income ratio
Nmillion
32
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013 Achievements:
• Crossed 1 million mark in number of customers during the year;
• Grew number of ATMs by 44% to 359;
• Best Vehicle and Asset Finance Bank at the On Wheels Motor Industry awards for the third time in a row;
• Most Innovative Bank by Business Day newspaper for consumer loans
• Successfully developed Stanbic IBTC mobile app to provide end-to-end financial service to individual customers of
Stanbic IBTC Group with the following services on its platform:
MobileMoney
Banking services
Pension and Mutual Fund services
Airtime purchase and other value add services.
2014 Focus:
• Continue to increase customer base across all business segments;
• Driving down cost of operations;
• Improve operational efficiency through effective channel management;
• Focus on customer relationship management to ensure good quality service.
• Grow our business banking portfolio by supporting SMEs and small local corporates to achieve their business
needs.
2013: PBB Achievements and focus
33
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Wealth
Demola Sogunle
CEO, Stanbic IBTC Pension Managers
34
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Wealth financial analysis
Net interest income and Non-interest revenue Operating expenses and cost-to-income ratio
570 806 1,684 1,948
8,101 9,220
12,368
16,712
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2010 2011 2012 2013
Net interest income Non-interest revenue
Nmillion
4,381 4,341
6,581 6,401
0%
10%
20%
30%
40%
50%
60%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2010 2011 2012 2013Operating expense Cost-to-income ratio
Nmillion
Growth in assets under management and RSAs
91.4 93.6 125.0 159.0 488.8 606.2
865.9 1,157.7
834.3 939.2
1,054.5 1,221.0
0
200
400
600
800
1,000
1,200
1,400
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
2010 2011 2012 2013
Asset management Pension management
Retirement saving accounts
Nbillion Number (000)
• Net interest income grew 16% to N1.9 billion, as a
result of favourable yields on money market
investments.
• Non-interest revenue increased 35% to N16.7
billion, driven majorly by a 33% growth in assets
under management supported by growth in
number of clients and size of contributions as well
as the good performance of the stock market
during the year.
Operating expenses was down 3%. Staff cost
increased 17% as a result of inflation adjusted
salary increase, while other operating costs
declined by 15%, as a result of non-occurrence of
one-off regulatory induced technology
improvement that existed in 2012. Consequently,
cost to income ratio improved significantly from
46.8% in 2012 to 34.3%.
35
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013 Achievements:
• Crossed N1 trillion in assets under management;
• Launched a new sharia complaint mutual fund, Stanbic IBTC Iman Fund, during the year;
• Launched the first mobile office in the pension industry – “Pension on Wheels”.
• Awarded the Best Investment Manager Company in Nigeria in 2013 by World Finance;
• Won our first State Bond mandate as Lead Trustee in the Trustees business; and
• Achieved 61% growth in number of clients in the Trustees business.
2014 Focus:
• Creation of an alternative investment desk and the launching of our first Exchange Traded Fund;
• Exploration of online registration as an alternative to capture the internet savvy subset of prospective Retirement
Savings Account (RSA) holders;
• Increase visibility of the Trustees business by active collaboration with Banks that do not have associated Trustee
Companies and introduction of Stanbic IBTC Trustees website; and
• Service quality and greater accessibility to clients by building a culture of service and being customer centric;
2013: Wealth Achievements and focus
36
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Prospects and outlook
Sola David-Borha
Chief executive
37
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Conclusions
Results reflect progress even in the fast changing regulatory environment
• Improving RoEs and consolidating market share;
• The personal banking business is growing customers at the desired pace in a sustainable manner;
• Our balance sheet driven business is growing the right liabilities while asset growth in business banking is
picking up momentum;
• The innovativeness of our people continues to be reflected in our fee and trading revenue lines – across all
businesses; and
• Stanbic IBTC brand awareness is consistently improving.
38
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Moving forward
Our key execution priorities going forward
• Maintain rigour in credit process while achieving sustainable loan growth;
• Greater collaboration between our businesses to deliver a truly end to end customer experience;
• Streamline and/or re-design processes and procedures for improved customer experience and/or cost
reduction; and
• Continuous improvement in risk management capability as well as readiness for regulatory changes.
• Depending on interest rates, raise Tier II capital of up to N15 billion
39
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2014: Prospects and outlook
•Improve CASA ratio to 60% from 55% Deposits growth
25%
NPL ratio
•Business banking opportunities, coupled with improved CASA.
•Offset however by growing FCY loan demand
Net interest margin
>5%
•Disciplined approach to spend coupled with cost optimisation projects.
Cost to income ratio
<63%
Tax rate Return on equity – 23%
•Opportunities in business banking, coupled with workplace banking solution
•Oil & gas and power sectors
Loan growth
15%
•Maintaining appropriate balance between risk and reward
•Increased client engagement by RMs
NPL ratio
<5%
•Rigour in credit processes
•Improvements in arrears management
Cost of risk
<1.5%
Target Comments
40
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Q & A
41
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
Appendix
42
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Group statement of financial position
2013 Change 2012
Nmillion % Nmillion
Cash and cash equivalents 120,312 13 106,680
Trading assets 40,711 (65) 114,877
Pledged and derivative assets 26,259 0 26,149
Financial investments 139,304 62 85,757
Loans and advances 383,927 32 290,915
Loans and advances to banks 94,180 >100 24,571
Loans and advances to customers 289,747 9 266,344
Current and deferred tax assets 7,716 45 5,212
Other assets 19,829 (13) 22,771
Property and equipment 24,988 2 24,458
Total assets 763,046 13 676,819
Equity 94,313 13 83,341
Non-controlling interest 3,321 44 2,310
Total equity 97,634 14 85,651
Trading liabilities 66,960 (24) 88,371
Derivative liabilities 1,085 41 772
Customer and current accounts 468,038 23 382,051
Deposits and current accounts from banks 51,686 94 26,632
Deposits and current accounts from customers 416,352 17 355,419
Other borrowings 48,764 (27) 66,873
Subordinated debt 6,399 >100 -
Current and deferred tax liabilities 7,788 61 4,844
Other liabilities 66,378 36 48,257
Total liabilities 665,412 13 591,168
Total liabilities and equity 763,046 13 676,819
43
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Group quarterly statement of financial position
4Q 2013 3Q 2013 2Q 2013 1Q 13
N’million N’million N’million N’million
Assets
Cash and balances with central banks 120,312 78,281 38,879 59,421
Trading assets 40,711 134,694 160,871 260,632
Pledged and derivative assets 26,259 25,279 25,237 24,127
Financial investments 139,304 141,833 142,522 110,448
Loans and advances 383,927 427,498 375,188 351,592
Loans and advances to banks 94,180 427,498 94,351 82,391
Loans and advances to customers 289,747 138,703 280,837 269,201
Other assets 19,829 38,915 47,446 49,226
Current and deferred tax assets 7,716 5,677 5,146 5,565
Property and equipment 24,988 22,528 23,047 23,702
Total assets 763,046 874,705 818,336 884,713
Equity
Shareholders’ equity 94,313 90,917 91,759 87,129
Non-controlling interest 3,321 2,617 2,072 2,676
Total equity 97,634 93,534 93,831 89,805
Liabilities
Derivative liabilities 1,085 627 383 368
Trading liabilities 66,960 92,137 81,567 158,407
Deposits and current accounts 468,038 557,173 520,994 507,883
Deposits and current accounts from banks 51,686 65,314 150,974 84,287
Deposits and current accounts from customers 416,352 491,859 370,020 423,596
Other borrowings 48,764 51,108 49,139 52,080
Subordinated debt 6,399 6,517 6,482 -
Current and deferred tax liabilities 7,788 6,059 5,173 6,379
Other liabilities 66,378 67,550 60,767 69,791
Total liabilities 665,412 781,171 724,505 794,908
Liabilities and equity 763,046 874,705 818,336 884,713
44
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Summarised group income statement
2013 change 2012
Nmillion % Nmillion
Interest income 62,585 8 57,818
Interest expense (25,572) 5 (24,264)
Net interest income 37,013 10 33,554
Non interest revenue: 48,219 42 33,856
Net fee & commission income 32,900 29 25,568
Trading income 14,895 >100 8,091
Other income 424 >100 197
Operating income 85,232 26 67,410
Less: Credit impairment charges (2,667) (61) (6,895)
Operating expenses (57,948) 18 (49,103)
Profit before tax 24,617 >100 11,412
Tax (3,844) >100 (1,255)
Profit after tax 20,773 >100 10,157
45
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Group income statement quarterly analysis
4Q 2013 3Q 2013 2Q 2013 1Q 2013
Nmillion Nmillion Nmillion Nmillion
Interest income 16,395 15,808 15,716 14,666
Interest expense (6,476) (6,651) (6,034) (6,411)
Net interest income 9,919 9,157 9,682 8,255
Non interest revenue: 11,773 12,378 12,196 11,872
Net fee & commission income 9,639 8,280 8,013 6,968
Trading income 2,047 4,037 3,924 4,887
Other income 87 61 259 17
Operating income 21,692 21,535 21,878 20,127
Less: Credit impairment charges (403) 104 (483) (1,885)
Operating expenses (17,010) (14,426) (13,022) (13,490)
Profit before tax 4,502 7,213 8,373 4,752
Tax 437 (1,341) (1,761) (1,179)
Profit after tax 4,716 5,872 6,612 3,573
46
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013 change 2012
Nmillion % Nmillion
Net interest income 16,622 23 13,496
Non-interest revenue 24,599 51 16,334
Total income 41,222 38 29,830
Credit impairment charges (323) (90) (3,329)
Operating expenses (20,844) 22 (17,264)
Profit before tax 20,054 >100 9,237
2013 2012
Total assets 455,664 13 402,597
Gross loans & advances 169,756 (3) 174,418
Deposit liabilities 218,454 14 191,388
Cost-to-income (%) 50.6 57.9
Non-interest revenue to total income (%) 59.7 54.8
Net interest margin (%) 3.6 3.4
Credit loss ratio (%) 0.2 1.9
Loan to deposit (%) 77.7 91.1
Non-performing loans to total loans & advances (%) 2.0 3.3
2013: CIB summarised financial statement and selected ratios
47
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: CIB quarterly performance analysis
4Q 2013 3Q 2013 2Q 2013 1Q 2013
Nmillion Nmillion Nmillion Nmillion
Net interest income 3,822 4,051 4,843 3,906
Non-interest revenue 4,241 6,861 6,561 6,936
Total income 8,064 10,912 11,404 10,842
Credit impairment charges 100 342 (347) (418)
Operating expenses (5,856) (5,492) (4,916) (4,580)
Profit before tax 2,307 5,762 6,141 5,844
Total assets 455,664 535,384 496,741 578,513
Loans & advances 169,756 182,283 183,391 174,949
Deposit liabilities 218,454 258,529 189,442 241,203
Cost-to-income (%) 72.6 50.3 43.1 42.2
Non-interest revenue to total income (%) 53 63 58 64
Net interest margin (%) 3.3 3.0 3.9 2.7
Credit loss ratio (%) (0.2) (0.8) 1.0 0.5
Loan to deposit (%) 77.7 70.5 96.8 72.5
Non-performing loans to total loans & advances (%) 2.0 1.9 2.6 3.4
48
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: PBB summarised financial statement and selected ratios
2013 Change 2012
Nmillion % Nmillion
Net interest income 18,443 0 18,374
Non-interest revenue 6,909 34 5,154
Total income 25,351 8 23,528
Credit impairment charges (2,344) (34) (3,566)
Operating expenses (30,703) 22 (25,194)
Loss before tax (7,696) 47 (5,232)
Total assets 284,810 11 257,191
Gross loans & advances 133,550 27 105,055
Deposit liabilities 197,898 21 164,031
Cost-to-income (%) 121.1 107.1
Non-interest revenue to total income (%) 27.3 21.9
Net interest margin (%) 6.5 7.1
Credit loss ratio (%) 1.8 3.4
Loan to deposit (%) 67.5 64.0
Non-performing loans to total loans & advances (%) 7.5 8.2
49
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: PBB quarterly performance analysis
4Q 2013 3Q 2013 2Q 2013 1Q 2013
Nmillion Nmillion Nmillion Nmillion
Net interest income 5,563 4,651 4,392 3,837
Non-interest revenue 1,753 1,818 1,679 1,659
Total income 7,315 6,469 6,071 5,496
Credit impairment charges (503) (238) (136) (1,467)
Operating expenses (8,910) (7,710) (6,709) (7,374)
Loss before tax (2,098) (1,479) (774) (3,345)
Total assets 284,810 320,017 304,975 285,961
Gross loans & advances 133,550 119,505 111,734 109,533
Deposit liabilities 197,898 233,330 180,578 182,477
Cost-to-income (%) 121.8 119.2 110.5 134.2
Non-interest revenue to total income (%) 24.0 28.1 27.7 30.2
Net interest margin (%) 7.8 5.8 5.8 5.4
Credit loss ratio (%) 1.5 0.2 0.5 5.9
Loan to deposit (%) 67.5 51.2 61.9 60.0
Non-performing loans to total loans & advances (%) 7.5 8.5 7.8 9.4
50
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Wealth summarised financial statement and selected ratios
2013 change 2012
Nmillion % Nmillion
Net interest income 1,948 16 1,684
Non-interest revenue 16,712 35 12,368
Total income 18,660 33 14,052
Operating expenses (6,401) (3) (6,581)
Profit before tax 12,259 64 7,471
Total assets 22,572 33 17,031
Assets under management (Nmillion) 1,316,690 33 990,881
Retirement savings accounts (number) 1,220,777 16 1,054,525
Cost-to-income ratio (%) 34.3 46.8
51
Stanbic IBTC FY2013 financial results presentation
Stanbic IBTC FY2013 financial results presentation
2013: Wealth quarterly performance analysis
4Q 2013 3Q 2013 2Q 2013 1Q 2013
Nmillion Nmillion Nmillion Nmillion
Net interest income 534 455 447 512
Non-interest revenue 5,287 4,192 3,956 3,277
Total income 5,821 4,647 4,403 3,789
Operating expenses (1,751)
(1,717) (1,397) (1,536)
Profit before tax 4,070 2,930 3,006 2,253
Total assets 22,572 19,304 16,621 20,239
Assets under management (Nmillion) 1,316,690
1,192,936 1,131,328 1,068,736
Retirement savings accounts (number) 1,220,777
1,194,324 1,152,617 1,094,870
Cost-to-income ratio (%) 30.1 33.1 31.7 40.5
52