KCB INVESTOR AND MEDIA PRESENTATION 2012 FULL YEAR GROUP AUDITED FINANCIAL RESULTS

Transcription

1 KCB INVESTOR AND MEDIA PRESENTATION 2012 FULL YEAR GROUP AUDITED FINANCIAL RESULTS 1

2 Outline 1. East Africa Macroeconomic View 2. The Bank at a Glance full year KCB group Financial Results 4. Future Outlook 2/28/2013 2

3 3

4 Regional Macros EAC GDP Rate(%) 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Kenya 7.1% 1.7% 2.6% 5.6% 4.4% 3.5% Tanzania 7.1% 7.4% 6.0% 6.8% 6.1% 7.2% Uganda 8.1% 10.4% 5.3% 5.1% 6.4% 5.6% Rwanda 5.5% 11.2% 4.1% 7.2% 8.6% 7.7% Burundi 3.6% 4.5% 3.5% 3.9% 3.9% 4.8% S. Sudan 8.6% 7.0% 8.0% Higher GDP and lower inflation create an environment for improved performance There were Liquidity challenges in Focus to drive value from retail channels Banking sector growing in 4-5 multiples of GDP Source: IMF 4

5 Overall Inflation Dec-11 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec % 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Dec-11 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Kenya 19.7% 18.9% 18.3% 16.7% 13.1% 12.2% 10.1% 7.7% 6.1% 5.3% 4.1% 3.3% 3.0% Tanzania 19.2% 19.7% 19.4% 19.0% 18.7% 18.2% 17.4% 15.7% 14.1% 13.5% 12.9% 12.2% 12.2% Uganda 27.0% 25.7% 25.7% 21.2% 20.0% 18.6% 18.0% 14.3% 11.9% 5.4% 4.5% 4.9% 5.5% Rwanda 7.4% 8.3% 7.8% 8.2% 6.9% 8.3% 5.9% 5.6% 5.8% 5.6% 5.4% 4.6% 3.9% Burundi 14.9% 21.6% 22.0% 24.5% 25.2% 22.5% 17.3% 17.6% 16.0% 15.8% 15.9% 11.7% 11.8% South Sudan 65.6% 47.8% 42.4% 50.9% 29.6% 79.5% 74.1% 60.9% 43.3% 42.9% 21.5% 41.1% 25.2% Source: IMF 5

6 Central Bank Rate Dec-11 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec % 20.0% 15.0% 10.0% 5.0% 0.0% Dec-11 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Kenya 16.5% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 16.5% 16.5% 13.0% 13.0% 11.0% 11.0% Tanzania 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% 12.0% Uganda 23.0% 23.0% 22.0% 21.0% 21.0% 21.0% 20.0% 19.0% 17.0% 15.0% 12.5% 12.5% 12.0% Rwanda 7.0% 7.0% 7.0% 7.0% 7.0% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% Source: Central Bank 6

7 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Jan-12 Feb-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Dec Currency exchange rate (USD): KENYA UGANDA TANZANIA RWANDA BURUNDI SOUTH SUDAN Source: Central Bank 7

8 General macro-economic environment: 1. Tight liquidity position 2. Slow asset growth 3. Large Inflation spread across the region 4. FOREX volatility and availability 5. EAC integration trade opportunities 6. Oil and Gas exploration projects 8

9 The Group Regional Footprint: The Bank has made tremendous progress with its regional expansion program. GROUP - Asset Base 367 Billion - Capital Base 53 Billion - No. of Branches ATM s - No. of Customers 2 Million - No. of Agents 4,627 SOUTH SUDAN Branches 27 ATMs 321 Staff UGANDA Branches 16 ATMs 319 Staff KENYA BURUNDI Branch 2 ATMs 173 Branches 864 ATMs 3,891 Staff 53 Staff RWANDA Branches 18 ATMs 333 Staff TANZANIA Branches 13 ATMs 245 Staff 9

10 The Group s Road Map to Accelerated Growth and Profitability Develop best-in-class enabling processes Lay the foundation to Leverage our talent Our Award Winning products Our unmatched regional presence Increased Revenues Reduction in Costs Improved Efficiencies Optimize the subsidiaries The bank is an early adopter of Research and Innovation Profitably grow business l in Kenya Our Growth Drivers Our unmatched Pursuit towards growing sustainable business Improved cost to income ratio International Business Mortgage Micro & SME 10

11 Increased focus on innovation and mobile banking solutions Our Products Our Channels Our Sponsorships Our Caring Nature New Brands Our Partnership 11

12 12

13 Group Income Statement (KShs. M) AUDITED Dec 2011 AUDITED Dec 2012 % Change Net interest income 23,885 30,636 28% Foreign exchange income 3,608 3,688 2% Gross fees and commissions 9,185 9,613 5% Other income (25%) Total operating income 37,559 44,598 19% Total operating expenses (22,284) (25,292) 13% Profit before provisions & tax 15,275 19,306 26% Provisions for bad debts (2,495) (3,756) 49% Bad debts recovered 2,349 1,658 (29%) Profit before tax 15,129 17,208 14% Tax (4,148) (5,005) 21% Profit after tax 10,981 12,203 11% Earnings per share

14 Assets Group Balance Sheet (KShs. M) AUDITED Dec 2011 AUDITED Dec 2012 % Change Cash and balances with Central Bank 42,708 36,420 (15%) Balances with other institutions 25,812 10,422 (60%) Investments in Government securities 43,591 86, % Investment securities 2,414 2,299 (5%) Net loans and advances 198, ,664 7% Fixed assets 9,683 10,217 6% Other assets 7,783 9,365 20% Total Assets 330, ,379 11% Liabilities Customer deposits 259, ,037 11% Balances due to other banks 14,105 9,334 (34%) Other liabilities 4,412 7,746 76% Long-term debt 8,525 8,923 5% Total Liabilities 286, ,040 10% Share capital 2,969 2,970 <1% Proposed dividends 5,492 5,644 3% Reserves and premium 35,904 44,725 25% Shareholders Equity 44,365 53,339 20% Total Liabilities and Equity 330, ,379 11% 14

15 Financial Highlights Dec 2012 Vs. Dec 2011 Profit Before Tax: KShs. 17.2B, up 14% (Dec 2011: KShs. 15.1B) Strong performance in Kenya business: Pre-tax profit, KShs. 15.8B up 12% (Dec 2011: KShs. 14.1B) Excellent results by International Business: Pre-tax profit, KShs. 1.4B up 39% (Dec 2011: KShs. 1.0B) Net interest income up 28% to KShs. 30.6B (Dec 2011: KShs. 23.9B) Total operating income up 19% to KShs. 44.6B (Dec 2011: KShs. 37.6B) Total operating expenses increased by 13% to KShs. 25.3B (Dec 2011: KShs. 22.3B) Group balance sheet rose by 11% to KShs B (Dec 2011: KShs B) Net loans and advances up 7% to KShs B (Dec 2011: KShs B) Customer deposits up 11% to KShs B (Dec 2011: KShs B) Cost to income ratio lower by 290bp to 57.4% (Dec 2011: 60.3%) Shareholders equity increased by 20% to KShs. 53.3B (Dec 2011: KShs. 44.4B) 15

16 PBT Growth & Contribution Strong profit growth (KShs. B) Contribution of PBT (KShs. B) Subsidiary contribution 7.0% Kenya Business % Subsidiaries 1.4 Subsidiary contribution 8.4% Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec %

17 Stable Margins and Yield on Assets on a high interest rate environment(%) Net Interest Margin Cost of Funds Comments: Stable NIMs despite high interest rate environment Focus on non-funded income remains crucial to drive earnings Steady decline on CIR is expected 17

18 Declining Group Cost to Income 68.9% 61.8% 62.8% 60.3% 57.4% FY08 FY09 FY10 FY11 FY12 Comments: Steady decline on CIR is expected One-off restructuring costs of 1.6 Billion in 2011 Bank is not focused on opening more branches this year. Key focus will be on growing Agency Banking and Mobi-Bank) Start up for Burundi Business affected the CIR Shared Service Centre serving the group 18

19 Healthy Balance Sheet Growth (KShs. Bn) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Net Loans Customer deposits Total Assets

20 KEY BANK STATUTORY RATIOS 30.0% 20.0% Core capital/total deposit CBK MIN core capital/total risk wighed assets 25.0% CBK MIN 21.6% 23.1% 20.0% 18.3% 18.7% 19.9% 21.3% 15.0% 10.0% 8.0% 10.0% 5.0% 8.0% 0.0% 2010 Dec 2011 Dec 2012 Dec 0.0% 2010 Dec 2011 Dec 2012 Dec 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Total capital/total risk weighed assets CBK MIN 23.2% 20.7% 22.7% 12.0% 2010 Dec 2011 Dec 2012 Dec 40.0% 30.0% 20.0% 10.0% 0.0% Liquidity ratio CBK MIN 30.7% 31.3% 35.5% 20.0% 2010 Dec 2011 Dec 2012 Dec

21 Agency Banking and Mobile Bank Agency Banking The number of agents increased by 77% in 2012 to 4,627 5% of the Bank s retail transactions are done through the Agency The mid term goal is to grow the number of agents to 10,000 in the region. Mobile Bank The number of registered mobile banking users increased by 625% in 2012 to 652,384 10% of the Bank s retail transactions are done through Mobile Banking 21

22 22

23 Outlook for 2013 STRONG PERFORMANCE DRIVEN BY TECHNOLOGY & INNOVATION TOP-LINE GROWTH LEVERAGING NON FUNDED INCOME REDUCTION IN THE NPL RATIO ACROSS THE GROUP LEVERAGE STRONG TALENT ACROSS THE GROUP BUSINESS FOCUS ON REDUCTION OF COST TO INCOME RECOVERIES OF NPL 23

24 24

25 CONTACT US