kcb group plc investor presentation. · q1 2017 actual q1 2018 y-o-y change actual q1 2017 actual...
TRANSCRIPT
KCB GROUP PLC INVESTOR
PRESENTATION.
Q1 2018 FINANCIAL RESULTS
Macro-Economic Highlights: Kenya
2
Source: CBK, WB
5.9%
5.4%5.7%
5.9%
4.9%
5.8%
5.5%
4.5%
6.0%
5.1%
1.6%
2013 2014 2015 2016 2017
GDP Forecasted to Recover
Real GDP Agriculture2018 P
Macro-Economic Highlights: Kenya
Sources: CBK, KNBS
103.2 103.7 103.9
103.2 103.3 103.2
101.3
USD/KES Exchange Rate
8.78 8.09 8.02
13.70 13.70 13.64 13.64
10.00 9.50
Interest Rate Evolution (%)
91 day T bill Average lending rates CBR Rate
3
11.48%
7.47%
8.04%
7.06%
4.73%4.18%
7.50%
2.50%
4.50%4.10%
3.50%
3.00%
3.60%
Inflation
Inflation rate Target Upper Target Lower Non Food Non Fuel
Macro-Economic Highlights: Kenya
4
Source: CBK
3.8%
3.3%
2.4% 2.1%
1.5% 1.4%1.6% 1.7%
2.0%
2.7%2.4% 2.7%
2.1%
Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18
12 Month Private Sector Credit Growth
-10.4%
-6.7%
-5.2%
-6.7%
-5.4%
2014 2015 2016 2017 2018 F
Current Account Balance (% of GDP)
Sources: IMF, Bloomberg
Macro-Economic Highlights: Regional
4.9
7.07.0
(3.7)
10.3
5.4
7.0 6.9
(7.1)
9.6
4.4
6.86.0
0.5
5.44.4
6.5 6.2
0.1
8.5
Uganda Tanzania Rwanda Burundi Ethiopia
GDP (%)
2014 2015 2016 2017
5
2,186
3,484
785.6
1,629
22.40 44.3
2253
3646
849
1765
27.22 130.3
Tanzania Uganda Rwanda Burundi Ethiopia South Sudan
Exchange rates to USD
2016 2017 Q1 2018
6.1%
3.1%
1.8%
7.9% 8.1%
4.0%3.0%
1.3%
6.1%
13.4%
Tanzania Uganda Rwanda Burundi Ethiopia
Inflation
2014 2015 2016 2017 Q1 2018
1.7%
52.8%
480.0%
182.2%
South Sudan
13.6%11.8%
4.4%
9.8%
3.0%2.2%
8.2%6.0%
2.6%
15.0%
Tanzania Uganda Rwanda Burundi South Sudan
91 Day T-Bills
2014 2015 2016 2017 Q1 2018
6
87% of Transactions outside the Branch
Source: KCB data
Mobile57%Branch
Teller13%
ATMs10%
Agency & POS20%
Q1 2018
Mobile, 40%
Agency & POS, 25%
Branch, 21%
ATM, 13%
Q1 2017
Source: KCB data
64% growth in Mobile Loan Disbursement
5.6
9.2
Q1 2017 Q1 2018
Mobile Loan Disbursement (KShs B)
7
37.3
63.3
Q1 2017 Q1 2018
Mobile transactions (M)
70%
8
96% growth in Agency volumes
Source: KCB data
4.6
7.8
Agency transactions (M)
Q1 2017 Q1 2018
25
49
Agency volume (KShs B)
Q1 2017 Q1 2018
3.8
6.2
Average trnx/ Agent p.d
Q1 2017 Q1 2018
70%
14%
96%
75
104
Revenue (KShs M)
Q1 2017 Q1 2018
39%
Source: KCB data
15% growth in NFI drivers
9
Lending Channels Bank transfers Branchtransactions
Trade finance Branch fees Money transfer
Q1 2017 Q1 2018
(3%) 45% 4% (26%) 95% 27% (11%)
OUR PERFORMANCE TO DATE
Group Asset Portfolio up
7%
KShs: 647B
Net Loans and advances
up 6%
KShs: 419B Investment in Govt.
Securities up 6%
KShs: 112B
Cash and Balances with Central Bank
and other Financial
Institutions
0%
KShs:71BFixed and
other Assets up 37%
KShs: 46B
KCB Bank Kenya Asset Portfolio up
8%
KShs: 561B
Net Loans and advances
up 6%
KShs: 384B Investment in Govt.
Securities up 4%
KShs: 97B
Cash and Balances with Central Bank
and other Financial
Institutions up 16%
KShs:40BFixed and
other Assets up 36%
KShs: 40B
7% Total Assets growth driven by Net Loans & Advances
11
KCB Group KCB Bank Kenya
Well-diversified loan book
12
409
445
17
13
5
Mar-17 Retail Corporate Mortgage Mar-18
* Group gross loans KShs.B
25.1%
15.8%
12.6%
4.6%
19.1%
3.3%
7.7%
2.5%
5.2%
3.7%
0.5%
35.3%
17.1%
10.9%
8.8%
8.6%
5.3%
4.8%
3.2%
2.9%
2.5%
0.4%
Personal/Household
Real estate
Manufacturing
Building and construction
Trade
Financial Services
Transport and communication
Tourism, restaurants and hotels
Energy and water
Agriculture
Mining and Quarrying
Industry Dec 2017 KCB Mar 18
NPL Migration and Concentration
13
1.0% 1.0% 1.0% 1.5%0.6%
7.9% 7.9% 8.0%8.5%
9.8%
Q1 2017 Q2 2017 Q3 2017 2017 Q1 2018
CoR NPL Group
3.7%
6.2%
10.4%
13.1%
3.6%
6.5%
10.4%
12.3%
3.2%
7.3%
10.4%
15.5%
3.3%
7.8%
11.0%
16.4%
3.2%
7.4%
14.8%16.3%
CHECK OFF MORTGAGE CORPORATE SME & MICRO
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Sector NPLIndustry Dec 17
KCB Mar 18
Trade 16.5% 29.4%
Manufacturing 12.8% 14.6%
Building and construction 17.3% 12.6%
Real estate 9.0% 6.6%
Improved IFRS Coverage Position
14
43.3%
61.0%
74.6%
56.9%
Q1 2017 Q1 2018
IFRS CBK
2017 industry position as at December
37.70%
34.5%
2016 2017
INDUSTRY
GroupLiabilities and Equity up 7%
KShs: 647B
Deposits up 9%
KShs: 496BBalances to banks and
Debt
0%
KShs: 32B
Equity down 2%
KShs:100B
Other Liabilities up
23%
KShs: 19B
KCB Bank Kenya
Liabilities and Equity up 8%
KShs: 561B
Deposits up 10%
KShs: 439BBalances to banks and Debt down
6%
KShs: 23B
Equity up 1%
KShs:77B
Other Liabilities up
3%
KShs: 22B
77% of Funding from Deposits
15
KCB Group KCB Bank Kenya
Well-funded and Diverse Portfolio
Deposits by Type Q1 2017
64%5%
24%
7%
Demand Savings Term Call
Deposits by Type Q1 2018
42% 50% 51% 50%
55% 47% 46% 48%
2% 3% 3% 2%
2015 2016 2017 Q1 2018
Corporate Retail Other
16
66%4%
25%
5%
Adequate capital position
Group Core Capital to RWA Group Total Capital to RWA
10.5% 10.50% 10.50% 10.50%
15.7% 15.30% 15.50%
15.10%
2015 2016 2017 Q1 2018
Min. Core/RWA Core Capital /RWA
14.5% 14.50% 14.50% 14.50%
16.9%
18.00%
16.60%
15.30%
2015 2016 2017 Q1 2018
Min. Total/TWA Total Capital /RWA
17
Resolute strategy delivers 7% balance sheet growth
KShs Billions
KCB Group KCB Bank Kenya
Actual Q1 2017
ActualQ1 2018
Y-O-Y Change
Actual Q1 2017
ActualQ1 2018
Y-O-Y Change
Cash and balances with central bank 31.9 33.8 6% 28.8 30.4 6%
Balances with other institutions 38.9 37.1 (5%) 6.2 10.0 63%
Investments in Government & Other securities
106.0 112.1 6% 93.2 96.6 4%
Net loans and advances 395.5 418.6 6% 362.9 383.9 6%
Fixed assets 12.6 14.4 14% 9.1 10.1 11%
Other assets 20.9 31.4 50% 20.3 29.9 47%
Total Assets 605.8 647.5 7% 520.5 560.9 8%
Customer Deposits 456.8 496.4 9% 397.9 438.7 10%
Balances due to other banks 8.4 9.5 14% 4.8 4.7 (2%)
Other liabilities 15.8 19.4 23% 21.5 22.0 3%
Long-term debt 23.6 22.5 (5%) 19.9 18.4 (7%)
Total Liabilities 504.5 547.8 9% 444.0 483.9 9%
Shareholders’ Equity 101.2 99.6 (2%) 76.5 77.0 1%
Total Liabilities and Equity 605.8 647.5 7% 520.5 560.9 8%
18
14% Growth in Earnings
KShs Billions
KCB Group KCB Bank Kenya
Actual Q1 2017
ActualQ1 2018
Y-O-Y Change
Actual Q1 2017
ActualQ1 2018
Y-O-Y Change
Interest Income 14.1 15.7 11% 12.6 14.0 12%
Interest Expense (3.8) (4.2) 13% (2.9) (3.5) 20%
Net interest income 10.3 11.4 10% 9.6 10.5 9%
Foreign exchange income 1.3 1.0 (20%) 0.6 0.7 16%
Net fees and commissions 3.5 3.6 5% 2.3 2.7 15%
Other income 0.8 0.9 8% 0.7 0.8 13%
Total other operating income 5.6 5.5 0% 3.6 4.2 15%
Total other operating expenses (7.8) (8.3) (6%) (6.2) (6.7) -7%
Provisions for bad debts (1.0) (0.6) 37% (0.8) (0.5) -36%
Profit Before Loss on Monetary Position
7.1 8.0 13% 6.2 7.4 19%
Loss on Monetary Position (0.5) (0.5) 0% 0.0 0.0 0%
Profit before tax 6.6 7.5 14% 6.2 7.4 19%
Tax (2.1) (2.3) (12%) (1.7) (2.1) 18%
Profit after tax 4.5 5.2 14% 4.5 5.4 20%
19
Overview of Key Financial Ratios
Return on Average Equity
Cost to Income*
Gross NPL to Gross Loans
NPL Coverage
Debt to Equity
Non funded income to total income
Cost of funds
Net Interest Margin
Cost of risk
Loan to Deposit Ratio
Growth of Net Loans and Advances
Growth of Customer Deposits
23.6% 19.5%
47.4% 46.2%
7.8% 8.5%
84.6% 74.4%
14.5% 14.0%
28.3% 32.2%
2.8% 3.0%
9.2% 8.9%
0.9% 1.5%
90.7% 85.1%
19% 10%
16% 11%
20.2%
48.3%
9.8%
56.9%
22.6%
32.7%
3.2%
8.2%
0.6%
84.3%
6%
9%
Q1 17 Q217 FY 17 KENYA GROUP
20.3%
52.5%
7.9%
79.6%
23.3%
35.0%
3.1%
7.9%
1.0%
86.6%
14%
8%
25.7%
45.0%
10.0%
64.0%
23.9%
28.3%
3.1%
8.2%
0.5%
87.5%
6%
10%
20
*excluding restructuring costs