financial results presentation 2018 - thevault.exchange roe credit loss ratio jaws 16,8 16,2 1h18...
TRANSCRIPT
FINANCIAL RESULTS
PRESENTATION1H19
Standard Bank Group
HIGHLIGHTS1H19
We measure our progress using five strategic value drivers
Group Purposethe reason we exist
Group Visionwhat we aspire to be
Africa is our home, we drive her growth
To be the leading financial services organisation in, for and across Africa, delivering
exceptional client experiences and superior value
In executing our group strategy our key focus areas are
Digitisation
Integration
Client centricityDeliver exceptional client
experiences
Leverage our digital platforms
Deliver Standard Bank Group
SEE = Social, economic and environmental
STRATEGIC FOCUS IS UNCHANGED
3
STANDARD BANK GROUP
ROE CREDIT LOSS RATIO JAWS
16,8
16,2
1H18
1H19
%
62
76
1H18
1H19
bps
(276)
109
1H18
1H19
bps
GROUP HEADLINE
EARNINGS
1H19: R13.4bn
1H18: R12.7bn+6%
BANKING HEADLINE
EARNINGS
1H19: R12.8bn
1H18: R11.7bn
+10%
DIVIDEND
PER SHARE
1H19: 454 cents
1H18: 430 cents+6%
4
STRONG UNDERLYING MOMENTUM IN OUR CORE OPERATIONS
OVERVIEW OF RESULTS
5
Delivering
valuable,
integrated, digital
solutions to our
clients
Shaping
a future-ready
workforce
Doing the right
business, the
right way
Achieving our
medium-term
financial targets
Driving long-term
sustainability by
delivering on the
group’s purpose
Adapting to changes in client behaviour and expectations, regulation and the broader financial services landscape,
including our existing, emerging and future competition
DELIBERATE ALLOCATION OF RESOURCES TO DELIVER A FUTURE-READY GROUP
MEASURING OUR STRATEGIC PROGRESS
FOCUSCLIENT
Shifting customer behaviour
Delivering what matters
Delivering value to
customers
Banking the client
ecosystems
Facilitating China-Africa
banking
Partnerships
7
MobyCash was
awarded Most
Innovative Cash
Management
Solution in Ghana
PBB SOUTH AFRICA INITIATIVES PBB AFRICA REGIONS INITIATIVES
FOCUS ON CUSTOMER EXPERIENCE AND DELIVERING VALUE
CLIENT FOCUS – PERSONAL, BUSINESS & COMMERCIAL
DELIVERING VALUE THROUGH INNOVATIVE PRODUCTS…
+6%
Face-to-Face Digital
OUR CUSTOMERS ARE INCREASINGLY DIGITAL…
-13%
Tier-priced mortgages Online personal unsecured
disbursements
… ENABLED THROUGH EFFICIENT DIGITAL SOLUTIONS
70% of high volume branch activities
have been digitised
Money transfer capability
… AND LEADING PARTNERSHIPS & PLATFORMS
-50%
EAP limits
queries
-66% -67% -97%
Statement
queries
Debit order reversal
queries (<R200)
>20% Number of new
home loans are
tier-priced
>20%Disbursements
are digital
>20%Savings
through digital
channels
45kVisitors per
month
33k Cards issued
in 1H19
>R1bnZAR top-ups in
1H19
LookSee platformVirtual cardShyft
99%of transaction
volumes now
through digital
channels
>1mReal time clearing
transactions
8
ATM -4%
POS +7%
BOL +2%
Mobile* +47%
Savings and investments
online origination
*Mobile banking transactional values
DIGITAL TRANSFORMATION
CLIENT FOCUS IN SA – PERSONAL, BUSINESS & COMMERCIAL
Transaction volumes, HOH % change
GROWING CUSTOMER VOLUMES… … SUPPORTED BY OUR EXPANDING CAPABILITIES
PARTNERING OUR BUSINESS CLIENTS… BANKING THEIR ECOSYSTEMS… AND FACILITATING CHINA-AFRICA BANKING
2016 2017 2018 1H19
Client ecosystems, #+70%
2016 2017 2018 1H19
New-to-bank retail customers
acquired through ecosystems, # +220%
Loans & advances Deposits
Balance sheet growth+37%
+38%
Transaction volumes, HOH % change Moby BankerInfrastructure capabilities
ATM +8%
POS +20%
BOL +43%
Mobile +57%
+36%
Active
merchants
Onboarding
time
-64%
Loan
origination time
-98%
+10%
ATMs
+22%
POS devices
92%of transaction
volumes now
through digital
channels
9
Face-to-Face Digital
+23%
-15%
FRANCHISE MOMENTUM ACCELERATING – UNDERPINNED BY DIGITAL SOLUTIONS
CLIENT FOCUS IN AR – PERSONAL, BUSINESS & COMMERCIAL
Supporting large domestic and multi-national corporate (MNC)
clients with expansionary funding
Partnering in the development of Oil & Gas opportunities
Tailoring investment instruments to support insurers and asset
managers
Raising hard currency funding for African governments
Leveraging our scale and expertise to provide FX liquidity and risk
management solutions
Promoting and facilitating Intra-Africa and Sino-Africa trade flows
Linking local and international investors with corporates and
governments
Improving client experience through continued digitisation of
channels and processes
10
Republic of Ghana
2019
USD 500m
Bridge to Eurobond
Joint Mandated Lead Arranger,
Underwriter and Lender
Legae Peresec
2019
Domestic Custody &
Derivatives Clearing
Standard Bank appointed for
derivatives clearing across the
client’s portfolio
Globeleq South Africa
Holdings (Pty) Ltd
2019
ZAR 1.8bn
Bridge Loan and
Pref Share Structure
Sole Mandated Underwriter and
Arranger
Prudent Energy Services
Limited
2019
USD 177 millionAcquisition of 74.02% of the shareholding in
Forte Oil PLC
Financial Adviser, Mandated Lead
Arranger and Lender
LEVERAGING OUR FRANCHISE AND CAPABILITIES TO CONNECT CLIENTS
CLIENT FOCUS – CORPORATE
… OPERATING ACROSS MULTIPLE SECTORS…
… DRIVING INCREASED REVENUE ACROSS OUR REGIONS
DIVERSIFIED CLIENT BASE…
… AND PRODUCTS…
FI Consumer P&I Industrials M&M O&G TMT S&PS Real Estate Other
1H18
1H19(1)%
CCY (3)%
+13%CCY +10%
+8%CCY +7% +3%
CCY +0% +8%CCY +4%
+16%CCY +14%
+31%CCY +26%
+54%CCY +50%
+11%CCY +8% +31%
CCY +26%
TPS
GM
IB 1H18
1H19
West Africa
+15%CCY +16%
East Africa
+42%CCY +27%
South &
Central
+4%CCY -2%
South Africa
+9%
MNC
+7%
MNC Intl.
+7%MNC AR
+20%
MNC SA
+3%
Other
Domestic
+18%
Large
Domestic
+29%
Domestic
clients
+24%
+6
CCY +5%
+10
CCY +6%
Sector revenue
Geographic revenue
11
Product revenue
Client
revenue
+12%
+11
CCY +8%
STRONG CLIENT REVENUE GROWTH, DRIVEN BY DOMESTIC CORPORATES
CLIENT FOCUS – CORPORATE
Client revenue
Leader in wealth management on
the continent
Strong growth in our international
clients’ assets
Building a future-ready insurance
business
Balancing digital platforms with
personalised client relationships
Melville Douglas delivering 1st
and 2nd quartile investment
performance and continued
growth in AUM in Nigeria
Group collaboration to ensure
end-to-end client solutions
Africa’s Best Bank
for Wealth
Management (2016,
2017, 2018 and
2019)
Melville Douglas
awarded Best
Global Equity Fund
in SA
12
WEALTH STRATEGY WEALTH DIGITAL INITIATIVES & AWARDS
A F R I C A R E G I O N S
Angola Mozambique
Botswana Namibia
Eswatini Nigeria
Ghana Tanzania
Kenya Uganda
Lesotho Zambia
Malawi Zimbabwe
I N T E R N A T I O N A L
Isle of Man
Jersey
London
Mauritius (Fiduciary)
S O U T H A F R I C A
SHORT TERM
INSURANCE APP
MY 360
APP
Aggregation tool that provides
clients with a 360-degree daily
view of their net wealth across
financial institutions and across
geographies
Makes car, home content and
structural insurance available
through a smartphone app and
telematics functionality enables
discounted premiums
DELIVERING A “BEFORE THE SUN SETS” SERVICE
CLIENT FOCUS – WEALTH CLIENTS
The Best Private Bank in
Wealth and Society –
Stanbic IBTC Asset
Management
Limited
The Best Asset/Fund
Management Company in
Wealth and Society - Stanbic
IBTC Pension Managers
Limited
SBG Securities
Top Overall Analysts
Award
for the last 4 years
ENGAGEMENTEMPLOYEE
32%Women
Men
14
WOMEN IN EXECUTIVE
POSITIONS**
DRIVING GENDER
EQUALITY
** As at 30 June 2019
HIGH ENGAGEMENT LEVELS
eNPS score (I would recommend Standard Bank as a
good place to work) increased from +14 to +23*
96% of
respondents are
willing to go the
extra mile
94% understand their
contribution to
our purpose
90% are proud
to be associated
with Standard
Bank
* Results from 2018 survey
Creating a great place to work
Equipping our workforce to meet changing customer
expectations
Building skills mastery and driving a culture to
encourage continuous learning and growth
Enabling bold and inspirational leaders
Focusing on succession planning and diversity
A reference site for nWOW and Agile
African
thematic
champion
SHAPING A FUTURE-READY WORKFORCE
EMPLOYEE ENGAGEMENT
CONDUCTRISK AND
1.81 1.74 1.61 1.60
0.62 0.44 0.43 0.42
1.36 1.27 1.16 1.13
1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19%
PBB
CIB
Group
Gross loans and advances
1 076 1 102 1 157 1 224
1-Jan-18 30 Jun 18 31 Dec 18 30 Jun 19
50 51 50 49
68 66 67
5653 54 54
51
1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19%
PBB
CIB
Group
21.0 23.6 23.8 23.3
14.1 13.4 12.9 13.2
35.1 37.0 36.7 36.5
1 Jan 18 30 Jun 18 31 Dec 18 30 Jun 19Rbn
Stage 1 & 2
Stage 3
… WHILE PROVISION LEVELS REMAIN ROBUST
… WHILE STAGE 3 DECLINED DRIVEN BY CIB
GROWING BALANCE SHEET…
STAGE 1 & 2 COVERAGE RATIO UNCHANGED…
Balance sheet provisions
Stage 1 & 2 coverage
16
Stage 3 coverage
PROVISIONS LARGELY FLAT DESPITE BALANCE SHEET GROWTH
RISK - CREDIT
1 Jan 18Rbn
SA
Africa Regions
Wealth Intl
Liberty
Other
Legacy assets
… SUPPORTING CONTINUED INVESTMENT IN AFRICA REGIONSROBUST BASEL III - COMPLIANT CAPITAL POSITION…
… AND PROVIDING RESILIENCE TO MANAGE HEADWINDS
CET 1 capital
R149bn
CET 1 ratio*
14%
Net asset value, split by legal entity
17
64%
18%2%
2016
58%
23%
4%1H19Angola
DRC
Ghana
Nigeria
Mozambique
Zambia
Zimbabwe
Countries impacted by
regulatory changes in 1H19
Countries which had elections
in 1H19
Malawi
Nigeria
South Africa
LEVERAGING OUR RESOURCES TO SUPPORT OUR AFRICAN-FOCUSED STRATEGY
RISK - CAPITAL
*SARB IFRS 9 phased-in basis
Bank 1 Bank 2 SBSA Bank 3 Bank 4
Customer cases opened, 1H19
18
TREATING CUSTOMERS FAIRLY MANAGING CONDUCT AND OPERATIONAL RISK
ALWAYS AWARE
Compliance conduct training**
96%
* Level 1 & 2 incidents in Africa Regions
** % completion rate
#3
10%
11%
19%
22%
21%
ATM money not dispensed
Fraud – Mobile bkng
Fraud – Internet bkng
Unauth. debit orders
CC merchant dispute
SBSA, % of industry disputes
ALWAYS ON
IT incidents*
8%
ALWAYS SECURE
Operational risk losses
29%
• Behaviours underpinned by group
culture, values and ethics
• Protect our reputation and the
trust our clients place in us
• Deliver fair client outcomes
• Effective, well embedded three
lines of defence model
• Manage and monitor behaviour
#3
DOING THE RIGHT BUSINESS, THE RIGHT WAY
CONDUCT
OUTCOMEFINANCIAL
change
CCY %
change
%
1H19
Rbn
1H18
Rbn
Net interest income 8 9 31.3 28.7
Non-interest revenue 3 4 23.0 22.0
Total income 6 7 54.3 50.7
Operating expenses 4 6 (30.9) (29.2)
Pre-provision profit 8 9 23.4 21.5
Credit impairment charges 22 20 (4.2) (3.5)
Banking activities headline earnings 8 10 12.8 11.7
SBG headline earnings 5 6 13.4 12.7
Net interest margin, bps 440 443
Credit loss ratio, bps 76 62
Cost-to-income ratio, % 57.0 57.6
20
Strong loan growth
supported NII
Margin well managed
Costs well contained,
delivering positive jaws of
109 bps
Credit impairment charges
increased off a low base in
1H18
OPERATING LEVERAGE DRIVING STRONG PRE-PROVISION PROFIT GROWTH
INCOME STATEMENT
21
12.8 13.4
(0.6)
(0.3)
7.2
6.2
0.9
PBB CIB Central &other
Bankingactivities
OBI Liberty SBGRbn
+8%
CCY +7%
+9%
CCY +6% +10%
CCY +8%
+6%
CCY +5%+2%
21
Banking activities
contributed ~95% of group
headline earnings
PBB and CIB continue to
deliver good headline
earnings growth
Central costs well
managed
Other banking interests
small but a drag
Liberty’s earnings
attributable to the group
dampened by treasury
share adjustment
BANKING OPERATIONS SIZABLE AND DELIVERING
SEGMENTAL HEADLINE EARNINGS
120 bps
COST-TO-INCOME RATIO HEADLINE EARNINGS RETURN ON EQUITY
LOANS AND ADVANCES TO
CUSTOMERS, AVERAGE
TOTAL INCOME CREDIT LOSS RATIO
616 653
1H18 1H19
99105
1H18 1H19
90 bps
61.4 60.9
1H18 1H19
6 054 6 066
211 471
432
664
1H18 1H19
Wealth Intl
Africa Regions
SA
+6% +6%
+54%
bpsRbnRbn
%Rm
22
Loan growth and margin
expansion supported NII
Credit well managed
Positive jaws, despite
branch reconfiguration
costs
Africa Regions and Wealth
International delivered
strong results
>100% 19.9%(1H18: 19.6%)
+8%
Through-the-cycle range
GROWTH UNDERPINNED BY OPERATIONS OUTSIDE OF SA
PERSONAL AND BUSINESS BANKING
19,9 21,7
13,6 14,1
1H18 1H19
NIR
NII
19.9 21.7
13.6 14.1
1H18 1H19
19,9 21,7
13,6 14,1
1H18 1H19
NIR
NII
COST-TO-INCOME RATIO HEADLINE EARNINGS RETURN ON EQUITY
LOANS AND ADVANCES TO
CUSTOMERS, AVERAGE
TOTAL INCOME CREDIT LOSS RATIO TO
CUSTOMERS
353 404
1H18 1H19
4
40
1H18 1H19
53.1 52.3
1H18 1H19
5 676 6 169
1H18 1H19
40 bps
60 bps+14% +7%
+9%
bpsRbnRbn
% Rm
23
Strong loan growth
NII diluted by margin
compression in SA
Credit loss ratio increase
driven by stage 1 and 2
charges
Effective cost management
Positive jaws of 156 bps
Robust headline earnings
growth
ROE diluted by increased
capital utilisation
10.2
Through-the-cycle range
19.3%(1H18: 20.5%)
STRONG BALANCE SHEET GROWTH AND OPERATING LEVERAGE
CORPORATE AND INVESTMENT BANKING
9.4 10.2
8.6 8.9
1H18 1H19
24
Headline earnings
change
CCY %
change
%
1H19
Rbn
1H18
Rbn
SBSA 3 3 7.4 7.2
Africa Regions 11 15 4.3 3.8
East 36 60 0.9 0.5
South & Central 1 2 1.8 1.8
West 13 14 1.6 1.4
ROE
1H19
%
1H18
%
SBSA 15.2 15.2
Africa Regions 22.3 25.4
East 20.2 18.8
South & Central 21.7 24.7
West 24.5 30.8
In 2018, the group increased its stake in Stanbic Holdings Plc (Kenya) from 60% to 69% and in Stanbic IBTC Plc (Nigeria) from 53% to 65%
* Determined based on various inputs,
including growth, resilience and returns
Strong performance*
Moderate performance*
Focus to improve*
Single representation/development
phase
SUPPORTED BY STRONG RECOVERY IN THE EAST REGION
REGIONAL PERFORMANCE
25
change
%
1H19
Rm
1H18
Rm
South African Insurance Operations 7 1 012 950
STANLIB South Africa 19 209 175
Africa regions >100 31 8
Other (8) (161) (175)
Normalised operating earnings 14 1 091 958
LibFin investments - SIP >100 922 374
Normalised headline earnings 51 2 013 1 332
IFRS adjustments (>100) (17) 189
IFRS headline earnings 31 1 996 1 521
SBG share of IFRS headline earnings 33 1 123 845
Treasury share adjustment (>100) (248) 12
Headline earnings attributable to SBG 2 875 857
Normalised operating
earnings improved
LibFin SIP supported by
better market conditions
New business margin
improved
Return metrics entered
their respective target
bands
Capital levels remained
robust
Headline earnings
attributable to SBG
negatively impacted by
treasury share adjustment
MAKING STEADY PROGRESS AGAINST STATED STRATEGY
LIBERTY
202 432
1H18 1H19Rm
>100%
26
ICBC STANDARD BANK PLC
(40% STAKE)ICBC ARGENTINA
(20% STAKE)
(70)(111)
(641)
1H18 1H19
Related to
single event
in June
(752)
ICBC Argentina performed
well, driven by margins and
boosted by a profit on sale
of an investment
ICBCS delivered a
disappointing result
− Operational performance
impacted by difficult
markets
− Single-client event which
resulted in a USD110m
provision
MINORITY STAKES - OFF STRATEGY
OTHER BANKING INTERESTS
27
ROE
15.1
14.4
16.1
16.816.2
15.3 15.2
16.8
17.5 17.5
1H15 1H16 1H17 1H18 1H19%
SBG Banking activities
MOVEMENT IN ROE
16,8 16,2
(0.3) (0.6)0.0
0.2 0.1
1H18 PBB CIB Centre OBI Liberty 1H19%
ICBCS PERFORMANCE A DRAG ON ROE
RETURN ON EQUITY
303 340 400 430 454
4750
53 54 54
0
10
20
30
40
50
60
0
50
100
150
200
250
300
350
400
450
500
1H15 1H16 1H17 1H18 1H19 %cps
Dividend Payout ratio
28
DIVIDENDS +6%CAPITAL RATIOS
CAGR
+11%13.1 13.2
13.7 13.8 14.0
13.6 13.614.2 14.4
14.8
16.0 15.916.2 16.2
17.3
1H15 1H16 1H17 1H18* 1H19*%
CET 1 Tier 1 Total Capital
* 1H18 and 1H19 capital adequacy ratios based on the SARB IFRS 9 phased-in approach
ROBUST CAPITAL LEVELS SUPPORTED DIVIDEND
CAPITAL AND DIVIDENDS
MEDIUM TERM TARGETS 1H19 1H18
GROWTH
Group HE growth Sustainable growth +6% +5%
Cost-to-income ratio Approaching 50% 57.0% 57.6%
Credit loss ratio* 70 - 100 bps 76 bps 62 bps
Africa Regions contribution** >30% 34% 32%
RESILIENCELCR and NSFR >100% >100% >100%
CET 1 ratio*** 11.0 - 12.5% 14.0% 13.8%
RETURNSROE 18.0 - 20.0% 16.2% 16.8%
Dividend Sustainable growth +6% +8%
* Revised through-the-cycle credit loss ratio range of 70 – 100 bps
** Contribution to banking headline earnings
*** Capital adequacy ratios based on the SARB IFRS 9 phased-in approach
29
ON TRACK TO DELIVER ON COMMITMENTS
MEASURING OUR FINANCIAL PROGRESS
IMPACTSEE
MEMBER SUSTAINABILITY
INDICES
Emerging Markets ESG Index
ESG RATINGS
FINANCIAL
INCLUSION
JOB CREATION
& ENTERPRISE
DEVELOPMENT
INFRASTRUCTURE AFRICA TRADE
& INVESTMENT
EDUCATION &
SKILLS
DEVELOPMENT
CLIMATE CHANGE
& ENVIRONMENTAL
SUSTAINABILITY
HEALTH
OUR SEE IMPACT AREAS*… … RELEVANT SDG’S**… … AND INDICES
31
DELIVERING SHARED VALUE WILL ENSURE OUR LONG TERM SUSTAINABILITY
SEE – UNDERPINNED BY OUR PURPOSE
* SEE impact areas have been refined since our year-end reporting * Sustainable Development Goals
OUTLOOKPROGRESS &
GROWTH OUTCOMES AND FORECASTS TO 2024
-
1,0
2,0
3,0
4,0
5,0
6,0
2017
2018
2019
2020
2021
2022
2023
2024
Real GDP Growth
SBG Africa Regions World SA
%
33
Source: EIU & IMF; SBG Africa Regions represents GDP growth outlook for
countries in which Standard Bank operates weighted by capital allocated as at
30 June 2019
Flagging global growth and the US-China trade war
remain key risks
Sub-Saharan Africa is expected to sustain its
recovery
− East Africa should continue to see robust growth
− West Africa is expected to experience a sustained
pick up, driven by a recovery in Angola and Nigeria
and continued strong growth in Ghana
South Africa
− Fiscal metrics have deteriorated
− Business and consumer confidence, consumption
and investment are likely to remain subdued in
2019
− 2019 outlook poor; some recovery in second half
− Better medium-term prospects on reform trajectory
ECONOMIC OUTLOOK
34
Continue to make progress against our medium-term financial targets
Continue to reduce cost growth and increase efficiency; permanently reshape the group’s cost structure
Continue to accelerate digitisation to meet our clients’ needs and enhance competitiveness and efficiency;
reconfigure our distribution capabilities
Continue to improve client experience
Pursue growth opportunities, including
− PBB: VAF, client journeys, ecosystems
− CIB: good AR opportunities, SA gradual recovery
Continue to support Liberty’s recovery and expand our relationship
Find lasting solutions for Other Banking Interests
ON TRACK TO DELIVER ON 2019 PRIORITIES
PROGRESS
35
Growing competitiveness in CIB, PBB, Wealth and
Liberty
− Delivering consistently excellent, secure and stable
service
− Delivering complete solutions to meet our clients’
needs
Digitisation
− New partnerships
− New products and services
Growing in Africa
TO BE THE LEADING FINANCIAL SERVICES ORGANISATION IN, FOR AND ACROSS
AFRICA, DELIVERING EXCEPTIONAL CLIENT EXPERIENCES AND SUPERIOR VALUE
ACHIEVING OUR VISION
36
Our business is sustainable economic
development
− We are here for our fellow Africans
and for the generations of Africans to
come
Seven impact areas for delivering SEE
SEE will remain integrated into our
businesses and measured by our SEE
value driver
Inclusion in sustainability indices
AFRICA IS OUR HOME, WE DRIVE HER GROWTH
LIVING OUR PURPOSE
FINANCIAL
INCLUSION
JOB CREATION
& ENTERPRISE
DEVELOPMENT
INFRASTRUCTURE AFRICA TRADE
& INVESTMENT
EDUCATION &
SKILLS
DEVELOPMENT
CLIMATE CHANGE
& ENVIRONMENTAL
SUSTAINABILITY
HEALTH
OUR SEE IMPACT AREAS
MEMBER SUSTAINABILITY
INDICES
Emerging Markets ESG Index
ESG RATINGS
INDICES
WHERE WE ARE HEADED
37
DIGITAL STANDARD BANK GROUP
• Serving clients predominantly online
• Processing in the cloud
• Right mix of skills and attitudes
• Embracing open innovation
• Underpinned by data and insights
HUMAN STANDARD BANK GROUP
• Providing the services, solutions and opportunities
that our clients and employees need to achieve
prosperity and fulfilment
FINANCIAL TARGETS FULLY MET
PERFORMANCEDRIVERS OF
APPENDIX I:
39
`CET1 14.0 %
GROWTH
NII + 9%Impairment
charge+20%
Operating
expenses+ 6%
OBI (>100%)
Liberty + 2%Average interest-
bearing liabilities+ 10%
NIM - 3 bps
Headline earnings
Dividend
per share+ 6%
RETURNS
NSFR 119%
LCR 124%
RESILIENCE
+ 6%
NIR + 4%
Average interest-
earning assets+ 10%
÷ ROE 16.2%Average
equity+ 9 %
DRIVING SHAREHOLDER VALUE
0
2
4
6
8
10
12
Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19
% Kenya Uganda
0
5
10
15
20
25
Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19
% Ghana Nigeria Angola
0
5
10
15
20
25
Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19
% Botswana Mauritius Mozambique Namibia Zambia
0
2
4
6
8
10
12
Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19
% South Africa US
40
SOUTH AND CENTRAL
WEST AFRICA
SOUTH AFRICA AND INTERNATIONAL
EAST AFRICA
AVERAGE RATES FLAT IN SA BUT TRENDED DOWN IN AFRICA REGIONS
INTEREST RATES
101,0 87,9
100,7
101,6
130,3 165,8
60
80
100
120
140
160
180
Jan 2018 Apr 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019
% ZAR/NGN ZAR/GHS ZAR/AOA
104,0
94,298,8
123,1
60
80
100
120
140
Jan 2018 Apr 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019
% ZAR/MZN ZAR/ZMW
99,0
85,8
102,3
89,5
70
80
90
100
110
Jan 2018 Apr 2018 Jun 2018 Sep 2018 Dec 2018 Mar 2019 Jun 2019
% ZAR/KES ZAR/UGX
99,3 114,1
80
90
100
110
120
130
Jan 18 Apr 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19
% USD/ZAR
41
SOUTH AND CENTRAL
WEST AFRICA
SOUTH AFRICA
EAST AFRICA
Rates have been re-based to reflect movement since 1 January 2018, straight lines represent the average rebased rates for the respective six month periods
ZAR, AOA AND ZMW WERE WEAKER WHILE KES, UGX AND NGN WERE STRONGER
FOREX RATES
42
AVERAGE GROSS LOANS TO
CUSTOMERS BY BUSINESS UNIT*
+6%
+14%
+7%
+12%
* Average gross loans and advances by Business Unit exclude Centre
AVERAGE DEPOSITS FROM
CUSTOMERS BY BUSINESS UNIT
540 625580 698
PBB CIBRbn
1H18 1H19
616 353653 404
PBB CIBRbn
1H18 1H19
PBB growth driven by
− Unsecured lending outpacing
secured lending
− Africa Regions outpacing SA
CIB growth underpinned by
− SA clients expanding into Africa
− Clients in East and West Africa
STRONG ASSET AND DEPOSIT GROWTH
BALANCE SHEET
43
NET INTEREST MARGIN -3 BPS
* Restated by R470m relating to interest in suspense cures
NII growth was supported by strong loan and deposit
growth across the portfolio
NIM movement
− Supported by stronger growth in higher margin
unsecured lending, Africa Regions growing loans
and advances faster than SA and effective margin
management in our offshore operations
− Negative impact of lower average rates in various
Africa Regions countries, higher cash reserving
costs in Nigeria and a competitive South African
loan pricing environment
443 440
(35)
(1)
28
1 4
1H18* Client yieldon lending
book
Client yieldon funding
book
Endow-ment
Treasury Mixand
other
1H19bps
MARGIN EXPANSION FROM AFRICA REGIONS OFFSET BY SA PRICING
NET INTEREST INCOME
44
NON-INTEREST REVENUE +4%
1H18 1H19Rbn
Other gains and losses on financial instruments
Other revenue
Trading revenue
Net fee and commission revenue
Net fee and commission revenue
− Supported by new loan originations and electronic
banking, card and FX transactions
− As clients continued to shift their transactional
banking from traditional to digital platforms, growth
in electronic banking fees continued to outpace
account transaction fees
− CIB balance sheet growth supported IB-related
asset-based fees, whilst knowledge-based fee
growth was muted
Trading revenue
− Growth remained subdued, particularly in SA,
constrained by low levels of market activity
+2%
+6%
+8%
GROWTH DRIVEN BY STRONG UNDERLYING VOLUMES
NON-INTEREST REVENUE
>100%
3 529 4 247
(59)
(1 007)
468
1 244
1 071
1H18 Stage 1 Stage 2 Stage 3* Stage 1 Stage 2 Stage 3* 1H19Rm
PBB CIB
45
45
PBB charges increased 12%
− New disbursements drove
stage 1 charges
− Model improvements offset
delayed legal processes
CIB charges increased >100%
− Growth in term lending
contributed to higher stage 1
impairment charges
− Increased stage 2 provisioning
following deterioration of credit
quality in South and East Africa
− Stage 3 charges decreased
due to lower defaults and post
write off recoveries
PBB R410m
CIB R308m
CLR
PBB – 99 bps
CIB – 3 bps
CLR
PBB – 105 bps
CIB – 30 bps
*Includes credit impairment charges related to off-balance sheet exposures
CIB CHARGES UP FROM LOW BASE IN 1H18
CREDIT IMPAIRMENT CHARGES
46
Staff costs
− Lower headcount due to natural attrition and
branch reconfiguration
− Staff costs well contained
Other operating expenses
− Increased IT spend due to increased software
licences, consultants and IT infrastructure and
lower capitalisation as capital programmes wind
down
− The adoption of IFRS 16 contributed to a higher
depreciation charge and lower premises costs
compared to the prior period
change
CCY
%
change
%
1H19
Rbn
Staff costs 3 5 17.4
Other operating expenses 6 8 13.5
IT 11 12 3.5
Depreciation 85 87 2.3
Premises (37) (36) 1.2
Amortisation of intangibles 2 2 1.2
Marketing (10) (10) 0.9
Professional fees 5 7 0.9
Other 3 7 3.5
Total operating expenses 4 6 30.9
WELL CONTAINED ACROSS THE BUSINESS
OPERATING EXPENSES
AND PARTNERSHIPSPRODUCT INNOVATIONS
APPENDIX II:
MyMo
MyMo is a transactional account for R4.95 per
month, that can be opened on our Banking App
within minutes. Customers receive a gold card with
data/airtime rewards (on Standard Bank Mobile)
when they open the account and swipe their card.
No documents are required to open the account,
customers can simply scan their ID, take a selfie
and get an account number immediately.
MVNO (Standard Bank Mobile)
MVNO allows customers to receive their monthly
bank account fees back in airtime and/or data when
swiping their bank card. This unique offering
provides complete flexibility to choose a Data and
Voice Plan.
Online home loans
With Online home loans, customers are able to
obtain an approved and guaranteed home loan.
Customers will receive a guaranteed loan offer that
allows them to shop with certainty for properties
within the guaranteed loan amount.
Virtual card
Virtual card is a prepaid card that can be used to
shop online. It allows for online payments and
purchases without credit or debit card details, but
provides the required security, control and simplicity.
Bizflex
Bizflex is a convenient working capital loan, with
flexible repayments based on a percentage of future
revenue. It is a digitally-enabled solution that
provides funds within 48 hours from application.
Customers receive simple, personalised and
transparent banking, with zero fees.
SimplyBlu
SimplyBlu is an all-in-one payment solution that
allows businesses to build and manage an online
business, all from a single secure platform. It’s a “e-
commerce in a box” solution.
LookSee
LookSee is a free property guide which enables
home buyers to fast-track their search for a new
home.
Noknok partnership
This partnership allows for better authentication to
secure customer transactions.
APPENDIX IIPBB SOUTH AFRICA INITIATIVES
48
Slydepay
Slydepay is a single payments platform which offers
a digital payment wallet and a merchant collections
solution, allowing for transaction convenience and
security. Several services are grouped into one,
such as bank account and linked mobile wallet
transfers. It provides the ability to link any bank card,
send and receive money from linked mobile money
users, purchasing of airtime, bill payments and QR
code / USSD retail payments.
Paperless loan
Instant paperless loans can be done in under
1 minute. A customer can log onto their internet
banking or Smart App to establish if they have
been pre-approved for a loan. If pre-approved a
branch visit is not required and money will appear
in the customer’s account instantly.
Motive partners
Motive partners is a founder of fintechs in the
financial services sector. They provide design
solutions and innovation. This partnership will
allow Standard Bank to utilise the platforms that
the fintechs develop.
Founders Factory Africa
Founders Factory Africa is a South African company
operating across Africa delivering a corporate-
backed accelerator and incubator with fintech as its
strategic sector. Its target is to build and scale 140
tech-based start ups across four sectors over the
next five years. In October 2018, Standard Bank
was the first investor into Founders Factory Africa.
Network International
Network International is a 3rd party payment
environment that offers Standard Bank an array of
services, from transaction switching and
authorisation services, technical support and fraud
management services.
APPENDIX IIPBB AFRICA REGIONS INITIATIVES
49
FINANCIAL RESULTS
PRESENTATION1H19
Standard Bank Group