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ABC Holdings Limited Interim Group Results for the six months ended

ABC Holdings Limited Interim Group Results for the six months ended. 30 June 2013. Agenda. - Highlights - Economic review - Operational overview - Financial review - Strategy and outlook. Highlights. Doug MUNATSI. Financial highlights. Financial highlights. Financial highlights.

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ABC Holdings Limited Interim Group Results for the six months ended

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  1. ABC Holdings Limited Interim Group Results for the six months ended 30 June 2013

  2. Agenda - Highlights- Economic review- Operational overview- Financial review- Strategy and outlook

  3. Highlights Doug MUNATSI

  4. Financial highlights

  5. Financial highlights

  6. Financial highlights

  7. Financial highlights

  8. Operational highlights

  9. Economic review Doug MUNATSI

  10. Global Economic Update Global Economy Europe Emerging Markets (EM) Sub-Saharan Africa (SSA)

  11. Global economy: shaken by a crisis & recovery is subject to downside risks Source: BancABC own research

  12. Major Risks to Economic Outlook

  13. Rapidly Rising Income Levels in China &Other Emerging Markets... US$ Source: BancABC own research

  14. Leading SSA Economies by GDP Growth Sub- Saharan countries among the fastest growing economies in the world 2001 - 2010 2011 – 2013 Equat. Guinea 17.2 Sierra Leone 14.3 Ghana 9.4 Angola 11.6 China 10.5 China 8.4 Liberia 7.9 Sierra Leone 9.1 Rwanda 7.8 2001 - 2010 2011- 2015 Chad 9.0 Nigeria 9.0 Mozambique 7.7 DRC 7.4 Ethiopia 8.4 Zambia 7.3 Rwanda 8.2 Ethiopia 7.0 Mozambique 8.0 Nigeria 6.9 Uganda 7.5 Tanzania 6.8 India 7.4 Niger 6.5 Tanzania 7.0 India 5.8 Source: IMF World Economic Outlook, April 2013

  15. Inflation Broadly Stable or Receding Source: BancABC own research

  16. Exchange Rates Development Source: BancABC own research

  17. Monetary Policy Update

  18. Banking Sector Overview Source: BancABC own research

  19. Opportunity to further banking Penetration in BancABC markets Banking Penetration (Loan/GDP) Loan/Deposit Ratio % Source: BancABC own research

  20. Operational Overview FRANCIS DZANYA

  21. Operational highlights H1

  22. Income statement • Loans and Deposits • Key focus areas BancABC Botswana highlights • NII: 111% higher • Cost to income ratio at 49% (2012: 57%) • Contribution to group profits at 47% • PAT increased by 127% in 1H13 compared to 1H12 to BWP81,1 million • Loans: up BWP244m since Dec 12 to BWP3.7bn • Composition of retail loans increased to 64% from 44% • NPLs: low at 1.8% • Deposits: at BWP4.8bn up by BWP554m since Dec 12 and by BWP1.3bn from Jun 12 • Measured growth • Keep pushing in deposit mobilization and reduction of cost of funding • Strengthen risk management (credit, liquidity and operational)

  23. Income statement • Loans and Deposits • Key focus areas BancABC Mozambique highlights • NII: 24% higher • Non interest income up 14% despite slow down in FX trading income • Huge impairment charge BWP17.7m. Single client contributed BWP10m • PAT contribution at 6% • Loans: up by 17% to BWP1bn from Dec 12 • Deposits up by 21% to BWP1.6bn from Dec 12 • Sluggish growth in retail business • High NPLs, up from 9% at year end to 12.8% • Control quality of the loan book • Selective growth on wholesale banking • More efforts to be placed on growing the retail loan book and deposits

  24. Income statement • Loans and Deposits • Key focus areas BancABC Tanzania highlights • Miniscule PAT at BWP591k • Sluggish NII : increase by 12% • Opex accelerated higher than income generation – business expansion • Non interest income improved to BWP39m vs BWP2m in 1H12 • Reduction in lending: loans at BWP592m compared to BWP747m in Dec 12 • High NPLs at 20% • Deposits: up BWP33m since Dec 12 to BWP1.2bn • Management of cost of funds key • Balance sheet restructuring taking shape • Move to new head office will increase visibility • Seeking business growth in retail banking • Collecting on NPLs

  25. Income statement • Loans and Deposits • Key focus areas BancABC Zambia highlights • Impressive growth in operating income: BWP121m against BWP80m recorded in 1H12 • Recoveries on previously written off loans • Cost to income ratio at 59% (1H12: 72%) • PAT contribution at 19% • Loans: up BWP94 since Dec 2012 to BWP1.1bn • Deposits up to BWP1.0bn from BWP834m in Dec 12 • NPL marginally better at 4.3% from 4.4% at year end • Continued effort to increase funding base • Keep momentum in non funded income (trade finance and treasury) • Overall the performance in 1H13 sets the tone for sustained growth in 2H13

  26. Income statement • Loans and Deposits • Key focus areas BancABC Zimbabwe highlights • NII: 91% higher • Huge impairment charge: total charge of BWP57m compared to BWP1.5 m in 1H12 • Contribution to Banking PAT dropped from 45% in 1H12 to 28% in 1H13 • Loans: marginally up BWP133m since Dec 2012 to BWP3.1bn • Deposits dropped by BWP811m to BWP2.3bn due to tightening liquidity in the market • NPLs still high at 9% • Top priority is liquidity and credit risk management • Measured growth: selective lending

  27. Operations As At June 2013 (Convenience conversion in USD) Tanzania # of branches: 5 (+0 in H1:2013) Total staff:152 Total Assets: $108m Total Deposits: $137m Total Loans: $69m Combined loss: $3.6m Zambia # of branches: 21 (+0 in H1:2013) Total staff: 217 Total Assets: $184m Total Deposits:$ 121m Total Loans: $131m PAT: $3.968m BancABC Mozambique # of branches: 9 (+1 in H1:2013) Total staff:188 Total Assets: $175m Total Deposits: $190m Total Loans: $119m PAT:$1.140m BancABC Botswana # of branches: 6 (+0 in H1:2013) Total staff: 257 Total Assets: $564m Total Deposits: $559m Total Loans: $425m PAT: $9.783m BancABC Zimbabwe # of branches: 23 (+2 in H1:2013) Total staff:516 Total Assets: $460m Total Deposits: $263m Total Loans: $362m PAT: $8.830m BancABC (Group) # of branches: 64 (+3 in H1:2013) Total staff:1,391 Total Assets: $1,596 m Total Deposits: $1,271m Total Loans: $1,145m Attributable profits: $17.2 m Banking operations Representative office

  28. Financial Review Beki Moyo

  29. Solid earnings…

  30. Solid earnings…

  31. Financial highlights

  32. Financial highlights

  33. Contribution per entity… Attributable profits (BWP’ m) 30 June 2013 30 June 2012

  34. Net interest income on the rise…

  35. Increased impairments in 2013… Impairment charge

  36. Non interest income well balanced…

  37. Operating expenses high but improved cost to income ratio…

  38. Cost to income ratios per entity

  39. Operating costs driven by retail…

  40. Staff complement driven by retail… Staff per entity

  41. Operating expenses driven by retail activity… Retail increased by 79%; wholesale increased by 14% Retail contributing 51% to opex in 1H13 , up from 39% in 1H12 High investment in human capital in Botswana and Zimbabwe, contributed to the increase in retail operating costs

  42. Steady balance sheet growth…

  43. Steady balance sheet growth…

  44. Steady growth in loans and deposit...

  45. Loans per entity… Loans (BWP’m)

  46. Loans driven by Retail banking… Retail book negligible before June 2011

  47. Retail banking loans contribution up… Modest growth in wholesale banking at 4% Retail contributing 44%, buoyed by Botswana

  48. Deposits per entity… Deposits ( BWP’ m)

  49. Funding

  50. Deposit growth from wholesale banking… Wholesale contributing 88%, Botswana highest Growth in deposits across all subsidiaries (except Zim)

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