INVESTOR BRIEFING Q3 2018

Transcription

1 INVESTOR BRIEFING Q3 2018

2 OUTLINE 1. MACROECONOMIC ENVIRONMENT 2. BANKING SECTOR AND COMPETITOR ANALYSIS 3. OUR BANK 4. FINANCIAL PERFORMANCE REVIEW 5. BUSINESS OVERVIEW 6. AWARDS & RECOGNITION 7. WAY FORWARD

3 I&M Bank Rwanda Sept 2018 at a glance 7.6Bln Net PBT 18.5Bln Total Income Successful Migration To new Core Banking System 17.8% Return on Equity 8.9% Deposit growth y/y Stable Customer satisfaction 5.5% Lending growth y/y 3

4 1 MACRO ECONOMIC ENVIRONMENT

5 Economic Outlook - Africa GROWTH RESILIENCE Economic growth in Sub-Saharan Africa is estimated to have picked up to 2.7 percent in 2018 from 2.3 percent in 2017, barely above population growth. The region s economic recovery continues but at a slower pace than expected (0.4 percentage points lower than the April forecast), due to downward growth revisions in the three largest economies in the region - Nigeria, South Africa and Angola. The latest data reveal that 11 countries experienced growth rates above 5.4 percent in (as opposed to seven countries in the April 2017 issue of Africa s Pulse). The 11 countries are Burkina Faso, Côte d Ivoire, Ethiopia, Ghana, Guinea, Guinea-Bissau, Kenya, Mali, Rwanda, Senegal, and Tanzania (figure 1.24). These countries house nearly one-third of the region s population and account for 20 percent of the region s total GDP. ECONOMIC OUTLOOK Economic recovery is expected to continue at a gradual pace, supported by a modest uptick in oil prices, the easing in drought conditions that had depressed agricultural output, and a rise in domestic demand as policy uncertainty f the past year recedes and investments rises. Growth in the region is projected to increase from 2.7 percent in 2018 to 3.3 percent in 2019, rising to 3.6 percent in 2020, slightly below April forecasts of 3.1 percent. Per capita income growth would remain well below its long-term average in many countries, highlighting the need for comprehensive policy measures to raise potential output. Source: World Bank Africa s Pulse October

6 Eleven countries continue to have annual average growth rates in that exceed the top tercile of the regional distribution in FIGURE 1.24: Growth Taxonomy GDP growth, Falling behind -5 Improved 5 Cameroon Niger Uganda Dem.Rep.Congo Mozambique Madagascar Zimbabwe Guinea-Bissau 3 1 GDP growth, Established Stuck in the middle Congo,Rep Burundi Chad -1 Angola Sierra Leone -3-7 Côte d Ivoire Guinea Senegal Kenya Lesotho Mali Malawi Botswana Namibia South Africa Tanzania Ghana Ethiopia Nigeria Rwanda Liberia Falling behind Slipping Stuck in the middle Improved Established Slipping FIGURE 1.27: Growth Forecast GDP Percent Percent Sub-Saharan Africa Angola, Nigeria, and South Africa avarage FIGURE 1.27: Growth Forecast: GDP per Capita SSA excl. Angola, Nigeria, and South Africa The outlook for GDP growth and per capita GDP growth in the region is projected to be positive and improving Per capita growth is expected to remain below its long-term average Source: World Bank staff calculation based on the WDI database. -2 Leading to, on average, lower inflation rates in the region in 2018 Percent FIGURE 1.20: Inflation, by Country Group, Sub-Saharan Africa Sub-Saharan Africa Source: World Bank staff calculations. Source: World Bank Africa s Pulse October 2018 Oil exporting countries in SSA Mineral and metals exporters in SSA e 2019f Non-resource-rich countries in SSA Sub-Saharan Africa Angola, Nigeria, and South Africa avarage Source: World Bank. Note: GDP = gross domestic product; SSA = Sub-Saharan Africa SSA excl. Angola, Nigeria, and South Africa Inflation is expected to pick up across the region in 2019, due to an increase in price pressures among metals exporters and non-resource-rich countries. Per capita income growth would remain well below its long-term average in many countries, highlighting the need for comprehensive policy measures to raise potential output. 6

7 Outlook on Rwanda Area Population Capital Official languages Currency Credit rating National Facts 26,338 sq.km 12,089,721 (2018 projection) Kigali Kinyarwanda, English, French Francs Rwandais (FRW) {1US$= FRW as at 28 September 2018} B/B S&P ratings Quarterly Real GDP growth (% change, YoY) Economic performance Rwanda s GDP up by 7.7 in the third quarter of 2018 in comparison to same quarter of The service sector contributed 48% of GDP, Agriculture by 28%, Industry 17%, while 7% was attributed to adjustment for taxes less subsides on products. The growth was mainly supported by recovery in the construction sector, improvement in transport and tourism services following recent international events hosted by Rwanda.. Rwanda s economy projected to grow by 7.2% in 2018 and between 7.8% to 8% in GDP breakdown by sector (Sept 2018) Tax (less subsidy) 7% Industry 17% 0 Service 48% Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 AGRICULTURE INDUSTRY SERVICES Taxes-subsidies GDP Agriculture 28% Source: National Bank of Rwanda, National Institute of Statistics of Rwanda, MINECOFIN & AFDB 7

8 2 THE BANKING SECTOR & COMPETITOR ANALYSIS

9 Banking Sector Overview FINANCIAL SECTOR - OVERVIEW The financial sector consists of 513 institutions The Banking sector holds 65.5% of the financial sector total Assets. Pension sector & Voluntary pension schemes combined follows with 18.1% Insurance holds 9.8% MFIs at 6.6% Total Assets 1,803 2, , , , BANKING SECTOR REVIEW The sector is comprised of 11 Commercial Banks, 3 Micro finance banks, 1 Development Bank & 1 Cooperative Bank. Loans & Advances 1,403 1,011 1,228 1,579 1,630 Loans & Advances remains the largest component of Bank s Assets at 57.7% (June 2018). Deposits continues to be the primary funding source representing 78.2% (June 2018) 2014 Deposits ,233 1,426 1,530 1,723 1, Source: BNR-Monetary policy and financial stability statement (August 2018) 9

10 Banking Sector Overview BANKING REVIEW - HALF YEAR 2018 Total Asset of the Industry registered an Annual Growth rate of 5% in 1H 2018 from billion in 2017 to billion. Banks remains adequately capitalized with CAR at 21.4%, above regulatory requirement. Liquidity position of the banking sector remains favorable with LCR (liquidity Coverage Ratio) and NFR (Net Funding Ratio) at 299.5% and 224.7% respectively. Loan portfolio quality improved with NPL ratio declining to 6.9% as at June 2018, from 8.2 percent in June Return on Equity (ROAE) stood at 9.6% and Return on Asset (ROAA) at 1.6% PRUDENTIAL REGULATIONS CAR (Tier One) 10% Solvency ratio (Total capital) 15% Liquidity Coverage Ratio 100% Net Stable Funding Ratio 100% Cash Reserve ratio 5% of Total Deposits KEY DEVELOPMENT IN REGULATORY ENVIRONMENT Regulation on corporate governance (n 01/2018 of 24/01/2018) sheds the lights on the requirements on corporate governance. Regulation on Business Continuity Management (n 04/2018 of 24/01/ 2018) requires banks to have business continuity policies, and will clarify key regulatory requirements in the policies. Regulation on Cybersecurity (n 02/2018 of 24/01/2018) aims at establishing minimum prudent standards to banks to protect against cybersecurity threats to banks. Regulation on Reporting requirements (n 2100 / [614] of 25/07/2018) aims at operationalizing the electronic reporting platform (Data Warehouse). Source: BNR-Monetary policy and financial stability statement (August 2018) 10

11 I&M Bank Performance vs. Banking sector for HY 2018 As at 30 June 2018 Industry I&M Bank Rwanda Solvency Ratio (Total Capital) 21.4% 17.6% NPLS/ Gross Loans 6.9% 2.24% Provisions/ NPL 67.2% 69.3% Return on Average Assets 1.6% 2.46% Return on Average Equity 9.6% 18.8% Liquidity Coverage Ratio 299.5% 178% Loan to Deposit Ratio 94% 68.3% Loans Growth 3.2% 7.6% Deposit Growth 9.5% 10.5% Source: BNR-Monetary policy and financial stability statement (August 2018) 11

12 OUR BANK 3

13 Paving the way in Banking Since

14 Who we are I&M Bank (Rwanda) Plc (erstwhile Banque Commerciale du Rwanda Limited -BCR) is the Rwanda subsidiary of I&M Holdings. It is the oldest financial institution and the first bank in Rwanda, having been incorporated in With an asset base of RWF 291 Billion as at 30 September 2018, the Bank is regulated by the National Bank of Rwanda as a Commercial bank and has a network of 16 outlets spread out across the country. Following the 2012 acquisition of 80% shares by a consortium lead by I&M Holdings from ACTIS, the Bank now boasts of a regional presence with operations in Rwanda, Kenya, Tanzania and Mauritius (as Bank One). I&M Bank (Rwanda) Plc offers the full range of personal, business, institutional and corporate banking products throughout all its locations in Rwanda. In February 2017, the Bank s shares previously owned by the Government of Rwanda were successfully issued to the public through an IPO % 19.62% The Bank s current shareholding structure is as follows: 79.22%: BCR Investment Company Ltd %: Public 0.99%: ESOP (I&M Bank Employees) 0.99% 0.17% 0.17%: Individual Investors 14

15 The Group 68.74% BCR INVESTMENT COMPANY MAURITIUS 65% 100% 100% 100% 50% 80% KENYA KENYA KENYA KENYA MAURITIUS R W ANDA 100% 70.3% 100% [I&M Holdings Ltd s effective Holding in I&M (Rwanda) is 55.01%] UGANDA T ANZANIA KENYA 15

16 Bank History April 9th: Presidential decree allows BCR activity as a Banking institution May 23rd: Incorporated SFOM 86.22%; GoR 10%; Trafipro 3.33%; Individuals 0.45% Banque Bruxelles Lambert (B.B.L) acquires entire SFOM shareholding. Later B.B.L is acquired by ING Group, and sales all its shares to the Government of Rwanda Privatized and ACTIS acquires 80% with 19.8% is retained by GoR and 0.2% by Private individuals 2006 First Bank in Rwanda to introduce Leasing Finance and Mortgage Loans A consortium led by I&M Holdings invests in ACTIS held shares First Bank in Rwanda to introduce Loan Syndication First Bank in Rwanda to sell a corporate bond on the Rwanda Stock Exchange First Bank in Rwanda to launch Electronic Banking Future Rename and rebrand to I&M Bank (Rwanda) Limited February 2017: Government of Rwanda owned shares are issued to the public through an IPO. Rename to I&M Bank (Rwanda) PLC. First Bank to launch Blockchain technology in Rwanda with SPENN 16

17 Where we are 1-9 IN RWANDA Rubavu 12 Musanze Gicumbi HQ Kigali 11 Rwamagana 1. Kigali (Head Office) 2. Kigali Heights 3. Remera 4. Nyamirambo 5. Chic Branch 6. Kenya Airways Cash Counter (UTC) 7. KCM Branch 8. Nyabugogo 9. Magerwa Cash Counter REGIONAL BRANCHES 10. Gicumbi 11. Rwamagana 12. Musanze 13. Karongi 14. Rubavu 15. Rusizi 16. Huye Karongi KENYA: 42 Branches TANZANIA: 9 Branches MAURITIUS: 13 Branches Huye Rusizi In early 2017, I&M Bank (Rwanda) Plc opened the first Select Banking Branch at the Kigali Heights. 17

18 Corporate Governance The Board has an appropriate balance of 2 Executive Directors, 7 Non Executives of which 5 are independent under the leadership of an Independent NED Board Chairman. The Directors, have vast experience stemming out of their varied background. The Board proved effective, responsible leadership characterized by ethical values of responsibility, accountability, fairness and accountability. The Board meets quarterly for scheduled occasions and holds specific meetings to deal with specific matters between scheduled meetings. The Board has set up five Board Committees and several top level Management Committees to assist in discharging its responsibilities; those committees have approved Terms of reference defining its role, responsibilities and scope. The Bank has an established and effective process of evaluating the Board s Chairman s and individual Directors performance, on an annual basis. This performance evaluation process is reviewed periodically to incorporate global best practice and any amendments issued by the National Bank of Rwanda, the regulator, from time to time. 18

19 Corporate Governance Board of Directors The Directors, collectively have vast experience stemming out of their varied backgrounds in different disciplines, which include Banking, Management, Law, Accounting, Investment and hands-on experience in various industries. Bill Irwin (Ind) Board Chairman Robin C. Bairstow Managing Director Faustin Byishimo Executive Director M. Soundararajan (Ind) Non Executive Director Crystal Rugege (Ind) Non Executive Director Andreas Grenacher Non Executive Director Arun S. Mathur Non Executive Director Richard Mugisha (Ind) Non Executive Director Dr. Estelle Jonkergouw (Ind) Non Executive Director 19

20 Core Competencies The I&M Bank Difference Strong Brand and Proven Track Record Good Governance Focus On Staff Development Wide Customer Base 20

21 Recent developments Digitization Journey On Sept , The Bank went live on the new Core Banking system (CBS), Finacle 10. Branch Network Kirehe Counter opened at the UNHCR premises Upgrade of Nyabugogo branch complete and re-opened CSR Initiatives In order to fulfill its commitment to honour the memory of victims of the 1994 Genocide against the Tutsi and help survivors rebuild their lives as well as contribute to the prevention of future conflict through education and confronting the prejudices and beliefs that lead to Genocide, I&M Bank Rwanda in partnership with Avega agahozo handed over a house to Madam Elina Mukandekezi. On Sept , I&M Rwanda marches in solidarity with children living with cancer. I&M Rwanda pays for Health care coverage (Mutuelle de Sante) for 2000 people fro Huye, Musanze and Rubavu Digital Offering Digitization Journey Rebranding to I&M Bank (Rwanda) PLC, following changes in Rwanda s company law Rollout of SPENN, first blockchain-based platform in Rwanda to provide cost-free payment services. Launch of iclick, an upgraded internet banking following upgrade of the Bank s core banking system Reviews and added features were made to our card offerings to improve card holders usage and payment experience 21

22 4 FINANCIAL PERFORMANCE REVIEW

23 Historical Performance Income Statement (FRW 000) Net Revenue per Staff 60,000 40,000 20,000-20,000 40,000 TOTAL OPEX Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 (7,776,679) (8,256,237) (8,958,106) (8,997,867) (10,902,070) Revenue per Staff Cost per Staff Net Revenue per Staff 10,439,671 11,467,136 14,636,066 18,211,020 Interest Income 22,619,948 7,344,752 8,022,148 10,267,816 13,278,877 Net Interest Income 15,287,406 1,949,819 2,424,331 2,233,691 1,215,745 1,330,932 Fees and Commissions 13,143,536 12,944,257 15,645,065 16,533,553 TOTAL REVENUE 18,493,138 5,366,857 4,688,020 6,686,959 PBT 7,535,686 7,591,068 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 CAGR 21% 20% 9% 9% 9% Interest Income Net Interest Income TOTAL REVENUE TOTAL OPEX PBT 66% 63% 60% 57% 54% 51% 48% CIR Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 23

24 Historical Performance Loan Performance (FRW Bln ) Key Balance Sheet (FRW 000) ,452,688 79,122,436 85,379, ,211,348 92,403,859 98,690, ,859, ,433, ,997, ,130, ,150, ,597, ,723, ,220, ,123,224 Dec-14 Dec-15 Dec-16 Dec-17 Sep Dec-14 Dec-15 Dec-16 Dec-17 Sep-18 Total Deposits Performing Loans Gross Loans Performing Loans Non Performing Loans CAGR Liquidity 50% 52% 55% 47% 40% 17% 18% 17% 24

25 Financial Performance Overview 5 Year Trend NPL Ratio CASA Ratio LDR Liquidity Ratio ROA ROE NIR Dec-14 Dec-15 Dec-16 Dec-17 Sep-18 Other Key Infos 44,858 44,178 50,631 49,650 52, % 120% 773, , , ,562 1,155,821 11% Revenue Per Staff CAGR Revenue Per Branch CAGR Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 25

26 NUMBERS5 OUR

27 Balance Sheet - 5 Year Trend In FRW (Billions) Dec-14 Dec-15 Dec-16 Dec-17 Sep-18 Bank Balances with BNR Investment in Gov. Securities Net Loans and Advances Total Assets Customer Deposits Long Term Borrowings Shareholders Funds All Amounts are in Billions of Rwandan Francs (FRW Billions) - Exchange rate as of 28 September 2018: 1$ = FRW (Source: National Bank of Rwanda) 27

28 Income Statement - 5 Year Trend In FRW (Billions) Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Net Interest Income Total Operating Income Operating Expenses (7.777) (8.256) (8.958) (8.998) (10.902) Loan Loss Provisions / Net Recoveries (1.494) (0.311) (1.120) Profit Before Tax Profit After Tax All Amounts are in Billions of Rwandan Francs (FRW Billions) - Exchange rate as of 28 September 2018: 1$ = FRW (Source: National Bank of Rwanda) 28

29 OVERVIEW6 BUSINESS

30 Our Business Corporate, SME, Retail The Bank offers a range of products including asset finance, trade finance and a range of deposit products. Our online platform gives a unique experience to our customers with unequalled services provided by our team. Ability to structure any term loan facility subject to our internal credit policy and in line with the National Bank of Rwanda s guidelines and satisfying all documentation and security requirements: These facilities can be in the form of Investment loans, Construction loans, Equipment loans, Invoice Discounting Insurance Premium Financing, Trade Finance, Advance on Contract or personal loans. Under these departments, relationship management is emphasized. Each account is placed under the care and responsibility of an officer of the Bank who has overall responsibility over the day to day management of the relationship. 30

31 Our Business Offering Current Accounts Savings Accounts Available in LCY and FX Working Capital / Investment Finance Overdraft Facility Advance on Contract Equipment Loan Construction Loan Vehicle Loan Bank Guarantees Letters of Credit Invoice Discounting E-Tax Payments International Transfers Bank Statements One-on-One Advisory Financial Skills Training Personal Banker 31

32 Our Treasury Offering Letters of Credit Open LCs with beneficiaries in any country Term LCs (1-2 years) LCs with IFC commitments Forex Trading Trading in USD, Euro, GBP, Yen, SA Rand and EAC currencies Spot and Forward Two way quote Swap transaction 32

33 Our Retail Offering Personal Accounts Current Accounts Savings Accounts Options for Women, Youth and minors. Housing Finance Mortgage Construction Loans Home Loans Personal Loans Credit Eclair Cash Plus Equity Credit Vehicle Loans Delivery Channels Electronic Banking Visa Debit, Credit and Prepaid Cards MNO Push-Pull 33

34 RECOGNITION7 AWARD &

35 Our Business Corporate, SME, Retail As a leading regional Bank, I&M Bank (Rwanda) Plc continues to be the recipient of several industry accolades both home and abroad 1. Rwanda Revenue Authority 2017 & 2018 Best Taxpayer award 2. Global Banking & Finance Review 2017 & 2018 Best Customer Service and Best SME 2018 Best Customer Service Global Banking & Finance Review 2018 Best SME Bank in Rwanda Global Banking & Finance Review 35

36 FORWARD8 WAY

37 Key Investments New Head Office Premises (Est. completion date: Q2 2019) IT Infrastructure Upgrade (Ongoing) Staff Development 37

38 APPENDIX9

39 Important Notice & forward-looking statements This presentation is based on I&M Bank Rwanda Plc (the Bank) s audited financial results for the period ended 30 September The Bank has obtained some information in this presentation from sources it believes to be reliable. Although I&M Bank Rwanda Plc has taken all reasonable care to ensure that the information herein is accurate and correct, the Bank makes no representation or warranty, express or implied, as to the accuracy, correctness or completeness of such information. Furthermore, I&M Bank Rwanda Plc makes no representation or warranty, express or implied, that its future operating, financial or other results will be consistent with results implied, directly or indirectly, by such information or with I&M Bank Rwanda Plc s past operating, financial or other results. Any information herein is as of the date of this presentation and may change without notice. I&M Bank Rwanda Plc undertakes no obligation to update the information in this presentation. In addition, some of the information in this presentation may be condensed or incomplete, and this presentation may not contain all material information in respect of I&M Bank Rwanda Plc. This presentation also contains forward-looking statements that relate to, among other things, I&M Bank Rwanda Plc s plans, objectives, goals, strategies, future operations and performance. Such forward-looking statements may be characterized by words such as estimates, expects, projects, believes, intends, plans, may, will and should and similar expressions but are not the exclusive means of identifying such statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause I&M Bank Rwanda Plc s operating, financial or other results to be materially different from the operating, financial or other results expressed or implied by such statements. Although I&M Bank Rwanda Plc believes the basis for such forward-looking statements to be fair and reasonable, I&M Bank Rwanda Plc makes no representation or warranty, express or implied, as to the fairness or reasonableness of such forward-looking statements. Furthermore, I&M Bank Rwanda Plc makes no representation or warranty, express or implied, that the operating, financial or other results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. I&M Bank Rwanda Plc undertakes no obligation to update the forward-looking statements in this presentation. 39

40 Thank You For more information, Please visit our website: Robin Bairstow Managing Director Lena Militisi Company Secretary Hugues M. Kayigamba Investor Relations