nmbz holdings limited fy 2015 financial results presentation
TRANSCRIPT
NMBZ HOLDINGS LIMITED
Year End Results Briefing For the 12 months ended 31 December 2015
Friday, 18 March 2016 14:30hrs
2015 Year End Results Briefing Outline 1. Welcome & Introduc1ons 2. 2015 Corporate Overview: -‐ Group Chief Execu1ve Officer
3. 2015 Financial Review: – Chief Finance Officer
4. Ques1ons & Answers 5. Refreshments
Group Chief Execu1ve Officer’s 2015 Corporate Overview
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ Mr Benefit Peter Washaya
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐
Corporate, Product & Channel Developments Corporate, Product & Channel developments in 2015: Ø We changed our strategic focus in September 2014 by focusing on the broader market segments. Ø Our results for the year ended 31 December 2015 tes1fy to the success of our change in strategy. Ø Our key differen1ators will con1nue to be:
v Service excellence. v Technology leadership. v Agility and quick response 1me. v And these will be supported by our experienced and
diversified human capital.
Corporate, Product & Channel Developments (Cont’d)
Corporate, Product & Channel developments in 2015: Ø Secured a US$5 million addi1onal line of credit from Norsad in April 2015, bringing the total drawdowns from Norsad to US$13 million. Ø We opened the Kwekwe Branch in April 2015, Masvingo Branch in October 2015, Borrowdale Excellence Centre in December 2015 and Excellence Centres at most of our branches in the major ci1es and towns. Ø Subsequent to year end, we opened the Chinhoyi Branch in January 2016 and merged the Angwa City & Joina City branches at Joina City.
Corporate, Product & Channel Developments (Cont’d)
Developments aOer the 2015 year end: Ø Commerzbank stopped US$ clearing following their decision to pull out of Zimbabwe and this affected TT payments. Ø On our part, we have opened new accounts with Ecobank Interna1onal (France) and Bank of China (South Africa). Ø The changeover has inconvenienced some of our customers and we sincerely apologise for that.
Corporate, Product & Channel Developments (Cont’d)
Channels to be introduced in first half of 2016: Ø Relaunch an enhanced Mobile Banking plaform with USSD and Web based App func1onali1es by 1 April 2016. Ø Rollout an Agency Banking partnership arrangement with a retail and supermarket chain by 30 April 2016. Ø Deploy Point of Sale terminals in merchants by 30 June 2016.
Economic and Sector Developments impacting earnings
Factors impac1ng current and future earnings: q The Minister of Finance & Economic Development has revised the es1mated GDP growth rate for 2015 from 3.2% to 1.5%.
q Year-‐on-‐year infla1on of minus 2.47% for 31 December 2015.
q The cap on interest rates from 1 October 2015 adversely affected our revenues in the last quarter of 2015.
q Defla1onary pressures are expected to persist into the first half of 2016.
Select Areas of Strategic importance q CapitalisaRon Plan to achieve Tier 1 status:
Ø We are targe1ng to be a Tier 1 Bank with a capital of +US$100 million by 31 December 2020.
Ø Based on our year end results to 31 December2015, we are on course to achieving the capitalisa1on plans through organic growth.
Ø Our top 5 interna1onal and local shareholders are: u African Century Financial Investments 18.54% u Old Mutual 15.27% u AfricInvest Financial Sector Holding 8.99% u FMO 8.99% u Norfund 8.99%
Select Areas of Strategic importance (Cont’d)
q We conRnue with efforts to aggressively source compeRRvely priced lines of credit which will capacitate the Bank to underwrite more good quality loans: Ø We recently got an approval for a US$20 million line of credit which is now at legal paperwork stage. We expect drawdown within the next 30-‐45 days.
Ø Three European DFIs are coming for a Due Diligence in 2 weeks 1me. We are nego1a1ng for lines of at least US$30 million.
Ø We are also in talks with other funders and discussions will be further progressed aoer the release of our 2015 results.
Select Areas of Strategic importance (Cont’d)
q ReducRon of Non-‐Performing Loans (NPLs) and NPL raRo: Ø The economic environment has con1nued to deteriorate and adversely affec1ng the pace of NPL reduc1ons.
Ø Our NPL ra1o stood at 13.19% at 31 December 2015 down from 17.74% recorded as at 31 December 2014.
Ø We made recoveries and collec1ons in 2015 amoun1ng to US$5.8 million and will con1nue to intensify our recovery efforts in 2016.
Ø We are targe1ng an NPL ra1o of 10% by 30 June 2016 and 5% by 31 December 2016. These are the targets set by the RBZ.
2015 Performance, Outlook & Strategy q Our entry into the broader market segments, cost management and stricter credit controls have posi1vely impacted earnings in 2015.
q The Group recorded an aoer tax profit of US$5.49 million for the year ended 31 December 2015 compared to an aoer tax profit of US$1.67 million for the year ended 31 December 2014.
q The Group will con1nue to focus on growth opportuni1es in the broader market segments.
Country Outlook q IndicaRons on the ground are that 2016 might conRnue to be a very difficult period for the economy: Ø The Ministry of Finance & Economic Development has put the GDP growth rate for 2016 at 2.7% and the IMF has a forecast of 1.4%.
Ø The drought being experienced in the 2015/2016 season will adversely impact economic ac1vi1es in the country.
Ø The planned clearance of Zimbabwe’s debt arrears with IMF, World Bank and African Development Bank will provide the required s1mulus to the economy if it unlocks addi1onal funding for the country.
Summary Financial Review
For the 12 months ended 31 December 2015 -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ Mr Benson Ndachena Chief Finance Officer
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐
Financial Summary 31 Dec 2015 31 Dec 2014 % Change
A`ributable profit(US$) 5 490 068 1 667 247 +229% Basic earnings per share(US cents) 1.43 0.43 +233%
Asset base (US$) 333 831 107 286 049 024 +17% Net asset value per share (US cents) 12.78 11.35 +13% Gross loans and advances (US$) 243 241 018 217 463 319 +12% Total deposits (US$) 277 216 769 235 362 677 +18% Total Shareholders’ Funds (US$) 50 543 864 45 047 616 +12%
Key Financial Ratios 31 Dec 2015 31 Dec 2014 Cost/Income 61% 79% Capital adequacy 19.26% 19.32% Return on Average Equity 12% 4%
Impairment Provisions/Loans and advances 4% 5% Gross NPLs/Total Loans and advances 13.19% 17.74% Liquidity raRo 30.4% 32.4%
Consolidated statement of comprehensive income 31 Dec 2015 31 Dec 2014 % Change
Net interest income 20 643 124 18 420 942 +12% Fee & commission income 20 984 694 15 121 536 +39% Net foreign exchange gains 1 416 445 1 822 432 (22%) Non-‐interest income 1 234 125 62 025 +1890%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐ Net operaRng income 44 278 388 35 426 935 +25% OperaRng expenditure (26 872 649) (27 984 051) (4%) Impairment losses on loans (9 496 601) (5 017 362) +89%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐ Profit before taxa1on 7 909 138 2 425 522 +226% Taxa1on (2 422 040) (768 455) +215%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐ Profit aOer taxaRon 5 487 098 1 657 067 +231% Other comprehensive income 2 970 10 180 (71%)
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐ Total comprehensive income 5 490 068 1 667 247 +229%
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Operating Income Mix 31 Dec 2015 % 31 Dec 2014 % Net interest income 20 643 124 47% 18 420 942 52% Net foreign exchange gains 1 416 445 3% 1 822 432 5% Fee & commission income 20 984 694 47% 15 121 536 43% Non-‐interest income 1 234 125 3% 62 025 0%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐ Net OperaRng income 44 278 388 100% 35 426 935 100%
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47%
3%
47%
3%
OperaRng Income Mix 31/12/2015
Net interest income
Net foreign exchange gains
Fee & commission income
Non interest income
52%
5%
43%
0%
OperaRng Income Mix 31/12/2014 Net interest income
Net foreign exchange gains
Fee & commission income
Non interest income
The expenditure composition
31 Dec 2015 % 31 Dec 2014 % AdministraRon costs 12 702 704 35% 11 798 556 36% Staff costs 11 231 250 31% 12 785 212 39% Deprecia1on & Amort. 2 200 589 6% 2 236 165 7% Other costs 738 106 2% 1 164 118 3%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐ OperaRng expenses 26 872 649 74% 27 984 051 85% Impairment loss on loans & advances 9 496 601 26% 5 017 362 15%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐ Total Expenditure 36 369 250 100% 33 001 413 100%
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Cost to Income Ratio Trend - 2011 to 2015
Cost to income raRo fell to 61% at 31 December 2015 from 79% at 31 December 2014 due to a 25% increase in operaRng income and a 4% decrease in operaRng expenditure.
0% 10% 20% 30% 40% 50% 60% 70% 80%
31/12/11
31/12/12
31/12/13
31/12/14
31/12/15
67%
61%
67%
79%
61%
Cost to income raRo trend 2011 -‐ 2015
Cost to income ra1o
Consolidated statement of financial position 31 Dec 2015 31 Dec 2014 % Change Shareholders’ Funds 50 543 864 45 047 616 +12% Deposits 277 216 769 235 362 677 +18% Other liabili1es 6 070 474 5 638 741 +8%
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐ Total Equity & liabiliRes 333 831 107 286 049 034 +17%
========== ========== ====== Cash and cash equivalents 63 439 347 54 750 561 +16% Investment securiRes 14 547 992 3 874 525 +275% Investment in debentures -‐ 4 614 047 (100%) Loans, advances & other assets 235 088 981 203 363 052 +17% Non-‐current assets held for sale 2 264 300 2 267 300 -‐% Investment ProperRes 8 125 800 4 453 300 +82% Property & equipment 6 601 086 6 345 267 +4% Other assets 3 763 601 6 380 982 (41%)
-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐-‐ -‐-‐-‐-‐-‐-‐-‐-‐ Total assets 333 831 107 286 049 034 +17%
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Sectoral Analysis of Deposits
q Banks & other financial ins1tu1ons (including lines of credit)
contributed -‐23% (2014 – 25%), Services – 17% (2014 – 16%), Individuals 11% (2014 -‐ 13%), Manufacturing – 14% (2014– 12%), Distribu1on – 10% (2014 -‐ 9%).
2%
25%
9%
13% 12%
2%
5%
13%
16% 3%
Sectoral Analysis of Deposits -‐ 31/12/2014 Agriculture
Banks and financial ins1tu1ons Distribu1on
Individuals
Manufacturing
Mining
Municipali1es and parastatals Other deposits
Services
Transport & Telecommunica1ons
3%
23%
10% 11% 14%
2% 4%
12%
17%
4%
Sectoral Analysis of Deposits -‐ 31/12/2015 Agriculture
Banks and financial ins1tu1ons
Distribu1on
Individuals
Manufacturing
Mining
Municipali1es and parastatals
Other deposits
Services
Transport & Telecommunica1ons
Sectoral Analysis of Loans and advances
q Significant concentra1on of Loans & Advances is to Individuals – 42% (2014 – 27%), Distribu1on -‐ 15% (2014 – 26%), Services – 18% (2014 -‐ 19%), Manufacturing – 12% (2014 – 13%) and Agriculture – 6% (2014 – 8%).
8% 5%
26%
0%
27%
13%
2% 19%
Sectoral Spread of Loans & Advances -‐ 31/12/2014 Agriculture &
hor1culture Conglomerates
Distribu1on
Food &
Individuals
Manufacturing
Mining
Services
6% 5%
15% 2%
42%
12%
0% 18%
Sectoral Spread of Loans & Advances -‐ 31/12/2015 Agriculture &
hor1culture Conglomerates
Distribu1on
Food &
Individuals
Manufacturing
Mining
Services
Questions and Answers
We Thank You
Ques1ons & Answers