facts behind figures first quarter 2013 - donuts facts behind figures -first quarter 2013 may 2013...
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Facts Behind Figures - First Quarter 2013 MAY 2013 Ghana Stock Exchange
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Speakers
Mr. Phillip Owiredu
Chief Financial Officer
Ms. Dzifa Amegashie,
Head of Investor Relations
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Mr. Frank. B. Adu
Chief Executive Officer
The Ghanaian Economy & Banking Industry
GDP growth: 8.2% in FY2012 (versus 3.2% global growth)
End of March 2013 inflation was 10.4%, 140bps above the FY2013 target
The cedi weakened against the dollar marginally during Q12013, moving up to 1.9178 from 1.8847
Interest rates remain high, closing at 22.93% (90-day) and 23.23% (182-day bill) at the end of Q1’2013
Total industry assets grew 23.5% y-on-y to GHS 27.23 billion for 2012
Total deposits grew 22.5% y-on-y to GHS 19.52 billion for 2012
Net loans and advances grew 40.0% y-on-y to GHS 11.68 billion for 2012
Capital adequacy across the banking sector rose to 18.6%, 120bps higher than the prior year due to recapitalization
The Ghanaian Economy
Ghana Banking Industry in 2012
Projected 2013 Real GDP of 8% (versus 1.2% -Advanced Economies and 3.3%-World)
Strong performance in commodities, telecoms and oil & gas expected to fuel economic growth
Target single digit inflation for year end 2013 is 9.0%
Declining sector NPLs will further enhance sector performance and stability
Outlook
Source: World Economic Outlook, April 2013, Ghana Statistical Service, Bank of Ghana Financial Stability Report, February 2013
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2011 (GHS’000)
2012 (GHS’000)
BBGL 316,860 EBG 456,212
EBG 262,599 BBGL 373,073
SCB 232,576 SCB 311,349
ADB 181,707 GCB 295,881
Stanbic 181,161 Stanbic 234,556
GCB 178,240 ADB 207,760
SG-SSB 150,674 CAL 207,424
ZBL 110,042 ABG 170,921
GTB 104,550 SG-SSB 169,814
ABG 98,965 GTB 143,576
UBA 94,103 ZBL 140,433
CAL 88,354 HFC 132,946
NIB 84,065 UTB 128,435
ICB 77,759 UBA 125,235
HFC 77,201 FBL 121,425
Baroda 64,796 NIB 100,210
Energy 63,655 UGL 93,897
UTB 61,229 PBL 88,203
FBL 56,317 ICB 78,471
UGL 50,821 FAMBL 77,594
FAMBL 50,378 Baroda 72,673
PBL 49,640 Energy 67,716
BOA 42,708 BSSIC 66,463
BSSIC 31,955 BOA 61,773
CAL Bank ranks 7th out of 24 banks by Shareholders’ funds following GHS 75mn private placement & significant profit growth in FY2012
Source: Bank of Ghana, IC Securities Research
Note: MBG excluded because of RMB deal
CAL Bank - Improved lending capability with increased capital base since 2012
NEW SHAREHOLDING STRUCTURE
SSNIT 33%
African Development
Partners I 29%
PROPARCO 7%
CENTUM 4%
OTHERS 27%
Total Number Of Shareholders 23,655
Total Issued Share Capital 548,261,549
CAL Bank - A Top 10 Bank
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Note: Loans & Advances include loans to customers and to banks, Investments include GoG securities and all other investments
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
EBG SCB GCB ADB CAL BBGL UTB Stanbic FBL UGL
Loans & Advances – FY 2012 GHS Billions
0.0
0.5
1.0
1.5
2.0
2.5
3.0
EBG GCB SCB BBGL Stanbic FBL ADB SG-SSB UTB ZBL CAL
Customer Deposits – FY 2012
CAL Bank is firmly positioned amongst the top 10 Banks in Ghana
Total Assets - FY 2012 Net Profit – FY 2012
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
EBG GCB SCB BBGL Stanbic ADB FBL CAL SG-SSB UTB
Loans & Advances Investments Cash Other Assets Plant, Property & Equipment
GHS Billions
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
GCB SCB EBG BBGL Stanbic CAL UBA GTB Baroda ABG
GHS millions
Source: Bank of Ghana, IC Securities Research *MBG figures are unaudited
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CAL Bank - performing favorably among its listed peers
Return on Assets Return on Equity
Net Interest Margin Net Profit Margin
Net Interest Margin: Annualised Net interest / Average interest Earning Assets Net Profit Margin: Net Profit / Total Operating Income
Net Profit Margin: Annualised Net Profit / Shareholder’s Funds Net Profit Margin: Annualised Net Profit / Total Assets
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Q1 2013 Highlights
PROFITABILITY
• Total operating income up 120.7% to GH¢ 49.6m y/y
• Operating expenses up 81.4% to GH¢ 16.8m y/y
• Cost to income ratio down to 33.9%
• PAT up 159.9% y/y to GH¢ 21.3m.
• EPS increased by 17.7% to 0.0389
• ROAE up to 52.3% from 36.7%
• ROAA up to 7.8% from 4.7%
CAL Bank has appreciated 76.3% year to date on the back of strong year-end and Q1 performance
• NPL down to 6.1% from 8.4% y/y
• Capital Adequacy up to 18.7% from 10.5% in Q1’12
RETURNS ASSET QUALITY
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Income Statement (GHS’000) Q1 2013 Q1 2012 FY 2012
y/y change
Net Interest Income 32,363 12,831 84,576 152.2%
Net Fees & Comms 7,733 4,292 25,824 80.2%
Net Trading Income 5,795 4,348 13,869 33.3%
Total Op. Income 49,557 22,452 133,054 120.7%
Total Op. Expenses (16,808) (9,265) (48,865) 81.4%
Impairment Charge (4,359) (2,320) (17,461) 87.9%
Profit Before Tax 28,391 10,867 66,854 161.3%
Profit After Tax 21,348 8,214 51,651 159.9%
Group Q1-2013 Performance- Income Statement
Total Income. Up 120.7%. y/y. Key Income drivers: • Interest income • Fees & Commissions • Trading Income
Interest Income. Up 152.2% y/y: Driven by loan re-pricing and 65% loan book
growth in key growth sectors:
• Energy, Oil & Gas • Transport & Communication • Manufacturing • Mining • Services
Non-Interest income. Up 78.7% y/y.
• Loan-linked commissions • Advisory fees • Forex trade income. • Trade finance income.
Impairment charge in line with growing loan book
*FY2012 Industry average. Q1’2013 industry data not available.
*Source: Bank of Ghana MPC 02-2013 Release
Comments
Interest income continues to drive revenue growth
52.3%
36.7% 35.0%
Q1'13Q1'12FY'12
Healthy return ratios
7.8%
4.7% 5.2%
Q1'13Q1'12FY'12
-
20
40
60
80
100
120
140
FY'12 Q1'12 Q1'13
GH
S m
illio
ns
Net Interest Income Net Fees & Commissions Net Trading Income Other Op. Income
Total Operating Income
Return on Average Assets Return on Average Equity
Profitability Q1-2013
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64% 57%
49.6m
22.5m
133.2m
19%
65%
12%
6%
Return on average assets: LTM Net Profit / Average Assets Return on average equity: LTM Net Profit / Average Equity
19%
4% 19%
16% 12% 7%
Balance Sheet (GHS’000) Q1 2013 Q1 2012 FY 2012 y/y change
Total Assets 1,313,268 871,814 1,162,855 50.6%
Loans and Advances
840,762 537,484 747,385 65.2%
Investment in Government Securities
244,296 149,657 240,481 63.2%
Fixed Assets 40,331 29,534 35,531 36.6%
Total Liabilities 1,083,806 774,833 955,431 39.9%
Customer Deposits
740,114 616,479 794,555 20.0%
Borrowings 244,438 137,224 130,707 78.1%
Shareholders Funds
229,462 96,981 207,424 136.6%
Group Q1-2013 Performance - Balance Sheet
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Total assets increased 50.6%. y/y. Key drivers: • Loans and Advances
Loans and Advances Up 65.2% y/y: Key sectors:
• Energy, Oil & Gas • Transport & Communication • Manufacturing • Mining • Services
Government paper (T Bills) up 63.2 % Customer Deposits. Up 20.0% y/y.
• Deeping customer relationships • New customer acquisitions
Robust loan portfolio with NPL ratio of 6.1% vs. 13.2%* industry average
*FY2012 Industry average. Q1’2013 industry data not available.
*Source: Bank of Ghana MPC 02-2013 Release
Comments
18.7%
10.5%
19.9%
Q1'13Q1'12FY'12
Asset Profile
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
FY'12 Q1'12 Q1'13
GH
S m
illio
ns
Loans and Advances Other Interest-Earning Assets Other Assets
58%
28%
14%
15%
21%
64% 64%
871.8m
1,162.9m
1,313.3m
12%
24%
Growth has been largely driven by interest earning assets
Capital Adequacy Ratio Industry NPL* vs. CAL NPL Ratio
Improving Asset quality
Careful risk management
BOG’s minimum of 10%
11 * Industry Q1’13 NPL as at March 2013
Total Assets
5.0%
8.4%
6.1%
10.4%
15.7%
13.4%
0.0%
5.0%
10.0%
15.0%
20.0%
FY12 Q1 12 Q1 13
CAL INDUSTRY
SECTORAL DISTRIBUTION OF LOANS
GROSS LOANS RATIOS
3%
8%
22%
9%
21%
5%
4%
15%
12%
Q1-2012
Agriculture
Mining & Quarrying
Manufacturing
Construction
Electricity
Commerce & Finance
Transport & Comms
Misc
Services
Government
2% 4%
22%
7%
20%3%
5%
11%
26%
Agriculture
Mining & Quarrying
Manufacturing
Construction
Electricity
Commerce & Finance
Transport & Comms
Misc
Services
Government
Q1-2013
84.2%
96.0%
74.6%
121.3%
FY2010 FY2011 FY2012 Q12013
Gross loans/Deposits Gross loans/Deposits + Term Funding
61.8%69.5%
62.2%
109.8%
Asset Profile Q1 2013
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Increasing profitability supported by stable interest spreads and cost efficiency
47.0%
49%
4% Q1-2013 Deposit Mix
Current Accounts
Time Deposits
Savings Deposits
Cost-to-income Ratio
64.8%
52.6%50.9%
34.4%33.9%
2009 2010 2011 2012 Q1-2013
Management continues to rebalance the deposit mix towards cheaper retail deposits
Deposit Mix and Profitability Q1-2013
13
83% 84.0%
16%
Q1-2013 Deposit Mix
Individuals and PrivateEnterprises
Public Enterprises
Cost-to-income ratio: Total Operating Expenses / Total Operating Income
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IINCOME STATEMENT (GHS’000)
2008 2009 2010 2011 2012 y/on/y change
5yr CAGR
Net Interest Income 16,431 22,635 37,075 41,394 84,576 104.3% 50.6%
Net Fees & Commissions 6,185 6,534 9,288 14,646 25,824 76.3% 42.9%
Net Trading Income 10,199 9,622 4,833 10,545 13,869 31.5% 8.0%
Operating Income 34,559 39,256 53,813 70,944 133,054 87.5% 40.1%
Total Operating Expenses (21,177) (25,450) (28,328) (36,135) (48,865) 35.2% 23.2%
Impairment Charge (2,186) (3,476) (12,849) (11,465) (17,461) 52.3% 68.1%
Profit Before Tax 11,499 10,515 12,598 23,352 66,854 186.3% 55.3%
Profit After Tax 9,068 8,303 9,466 16,905 51,651 205.5% 54.5%
Group 5-year Financial Performance
BALANCE SHEET (GHS’000)
2008 2009 2010 2011 2012 y/on /y change
5yr CAGR
Total Assets 338,902 452,812 509,992 809,364 1,162,855 43.7% 36.1%
Investment in Government Securities
43,530 75,138 117,668 154,880 240,481 55.3% 53.31%
Loans and Advances 190,938 214,715 256,634 411,582 747,385 81.6% 40.7%
Fixed Assets 14,371 15,018 27,379 28,779 34,669 20.5% 24.6%
Total Liabilities 301,474 394,388 431,214 721,010 955,431 32.5% 33.4%
Customer Deposits* 176,660 277,602 296,625 611,719 794,555 29.9% 45.6%
Borrowings 115,592 92,691 109,010 92,652 130,707 41.1% 3.1%
Shareholders Funds 37,428 58,424 78,778 88,354 207,424 134.8% 53.5%
* includes due to Banks
Outlook- 2013 & Beyond
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Corporate Banking
Treasury
Retail Banking
• Product-driven retail deposit mobilization will be focused on • Increasing retail deposits to reduce cost of funds and deposits ratio • Targeting the growing middle class clientele who have the appetite for asset-backed consumption • Improve brand visibility
• CAL’s corporate loan portfolio and syndicated transaction capacity will be grown by leveraging its increased balance sheet size
• Focus on promising growth sectors - energy, telecoms, mining, oil and gas • Enhance expertise to provide appropriate services to the increasing size of corporate clients
• Strengthen treasury activities to capitalize on economic growth opportunities • Improve capacity to participate actively in the bond market • Research and identify appropriate new money market products for introduction to market • Increase in credit & refinancing lines from correspondent banks
Human Resources
Technology
• Training and development of talent • Performance management and good reward system to enhance efficiency and motivation • Job rotations and mobility to hone diverse skills of employees
• Service quality will be improved by enhancing IT infrastructure • Focus on process automation, enhancing management information systems and investments into
modern communication systems
THANK YOU
Q&A
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