ANNUAL REPORT AND FINANCIAL RESULTS 31 MARCH 2011

Transcription

1 ANNUAL REPORT AND FINANCIAL RESULTS 31 MARCH 2011 Standing Committee on Finance 18 October 2011

2 Delegation Name Mr. Nhlanhla Nene Mr. Jabu Moleketi Mr Paul Baloyi Mr. Paul Kibuuka Mr. Luther Mashaba Mr. Anton Redelinghuis Mr. Admassu Tadesse Ms. Romeshni Govender Ms. Bathobile Sowazi Designation Deputy Minister of Finance Chairman of the DBSA Board of Directors Chief Executive Officer and Managing Director: DBSA Group Executive and Managing Director: DBSA Development Fund Group Executive: South Africa Operations Acting Group Chief Financial Officer Group Executive: International Division Group Executive: Group Strategy, Marketing & Communication Divisional Executive: Internal Audit Corporate Secretariat 2

3 Enablers Transformation and Managing Development Risk Governance Mr Paul Baloyi DBSA Governance and Organisational Framework Board of Directors Board SubCommittees BCIC Audit & Finance HRMC DPC Risk Management Committees EXCO Office of the CEO/MD Internal Audit Corp Sec CCC, RCC, PRMC DIC, IT ALCO PC, FMC HCMC CKM Social Development & Integration Economic Development Regional dev t & integration Institutional & human capacity failure/weakness Implementer Advocacy and Influence SOUTH AFRICA OPERATIONS INVESTMENT BANKING INTERNATIONAL DIVISION Development Fund Development Planning Financing in South Africa Financing outside SA Capacity Development & Deployment Rural Development Community Development Facilitation Development planning Research Policy Advisory Information Finance Treasury Risk Human Capital Enabling processes and systems Business Technologies & Facilities Strategy & Communication 3

4 2010/11 Corporate Plan deliverables reflected in the Board approved Corporate Balanced Scorecard 56% A. Development impact B. Sustainability 1. Development Fund initiatives (20%) Siyenza Manje Programme Vullindlela Academy Agencies Sustainable Communities Operations and maintenance 2. Rand value of total disbursements (13%) 3. Rand value of disbursements to identified public sector intermediaries in SA (8%) 24% 10. Maintain corporate credit rating in line with sovereign rating (3%) 11. Sustainable earnings (5%) 12. Cost to Income ratio (5%) 13. Nonperforming book debt as a % of total book debt (5%) 14. Quality of implemented research agenda (6%) 4. Number of projects in favour of low capacity municipalities (2%) 5. Rand value of grants disbursed (3%) 6. Projects originated in South Africa (approved and launched) (4%) 7. Number of jobs created (2%) 8. Number of households benefiting from access to basic services (2%) 9. Customer and partner satisfaction (2%) 20% C. Organisational capability 15. Value of spend on staff training (5%) 16. Level of staff engagement (5%) 17. % of unfilled vacancies at yearend (3%) 18. Staff satisfaction with internal knowledge management (2%) 19. Market perception of the Bank s image in development finance (5%) 4

5 Budget allocation 2010/2011 Dr Paul Kibuuka DF Implementation Operations Development Fund Capacity Development & Deployment Siyenza Manje Deployment of finance, engineering, town planning experts, artisans, young professionals to municipalities to transfer skills and implement projects to eradicate backlogs. Vulindlela & PACBP Capacity building & training providing short and long term accredited training courses in planning, management, finance and technical. Agencies Assists donors and development partners to implement development initiatives using DBSA corporate infrastructure. Operations & Maintenance Building capacity for sustainable operation & maintenance of municipal infrastructure, SMME development and building an O&M industry. Rural Development Division Institutional Turnaround Development & implementation of institutional turnaround strategies in collaboration with affected municipalities. Rural Development Solutions Development & implementation of rural economic turnaround strategies, MIG leveraging instrument and solutions to accelerate execution of rural development programmes. Rural Infrastructure Identifies & facilitate implementation of social and economic infrastructure projects in rural municipalities. Community Development & Facilitation Sustainable Communities Unit Mobilisation of different stakeholders to design sustainable development plans that addresses short, medium and long term development needs of communities. Project Management Unit Provides project management support to different programmes, developing systems, plans and frameworks for managing programmes. Project Development Unit Conceptualisation, feasibility & structuring economic development projects. CDD (75%) RDD 15% CDF 10% Siyenza Manje (63%) 5

6 Deployees categorised by expertise and municipalities supported Number of municipalities supported municipalities on direct deployment and 60 on shared services basis supported. A further 20 provincial departments supported FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Number of deployees FY 2009 FY 2010 FY SM deployee support mostly maintained Artisans increased Technical Experts Young professionals Artisans Supported and completed technical projects. Supported and completed nontechnical projects. Annual report page(s): 170 6

7 National distribution of municipalities supported by Siyenza Manje 126 municipalities on direct deployment and 60 on shared services basis supported Annual report page(s): 169 7

8 Siyenza Manje outputs MIG funds unlocked of R16.0 billion and MIG expenditure of R8.7 billion Provided onthejob training: o technical o 870 financial o 772 planning R billion MIG/capex allocation unlocked 16.0 R billion MIG expenditure unlocked 8.7 1,400 1,200 Onthejob training 1, , / / /09 Annual report page(s): 170, / / / / /11 Technical Financial 2006/ / / / /11 8

9 Development impact through Siyenza Manje programme 300, ,000 Households impacted & jobs facilitated 100 FY 2008 FY 2009 FY 2010 FY Improvement in audit findings 42% improvement in 83 SM municipalities with finance deployees , , , , , , , Jobs created Access to sanitation Access to water A further households were connected to new or upgraded bulk water systems and households from the upgrades in bulk sanitation infrastructure 2008/09 Audit 2009/10 Audit Number of municipalities supported by deployees % of municipalities with improved audit findings % municipalities with reduced number of audit queries Annual report page(s): 170,171,172 9

10 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 R million Number Other Development Fund Projects External learners trained (VA) Funds under management 12,000 10,000 8,000 FY 2008 FY 2009 FY 2010 FY ,381 9,772 1,200 1, Funds managed Nr of agencies , , ,000 1, Municipal official (SA) SADC and other Total external learners trained during the financial year of the delegates were identified by Siyenza Manje deployees. 81% of Siyenza Manje municipalities benefited from the training programmes. Annual report page(s): 167, % increase in Rand value of funds under management: R1.1 billion as at 31 March 2010 (FY 2010: R759 million). 35 active funds under management. Facilitated the delivery of infrastructure to the value R2.6 billion driven by IDIP programme (R998 million for education and R1.6 billion for health). 10

11 Mr Anton Redelinghuis Transportation 5% Other 6% Sanitation 3% Social infrastructure 4% Approvals per sector (value) Roads and Drainage 10% Water 16% Development funds 4% Approvals: Sector Focus Maintaining diversity Education 3% DBSA continued to make infrastructure funding available, especially to the public sector. Driven by approvals in energy, water and roads & drainage. SA approvals: R30.7 bn and SADC: R6.4 bn. SA municipal approvals very good progress in secondary and under resourced municipalities: o Metro s: R5 bn, secondary municipalities: R1.9 bn and under resourced: R486 million. Energy 49% Approvals per client category (value) Private sector intermediaries 12% Metro's (SA) 13% Secondary municipalities (SA) 5% Under resourced municipalities (SA) 1% Annual report page(s): 31 Other public 68% 11

12 Diversity of business disbursements Diversity of new business: Total disbursements of R8.3 billion. Significant portion (67%) of business still focused on public sector. Support to energy, transportation, ICT and roads & drainage. Disbursed R903 million to secondary municipalities and R35 million to underresourced municipalities. Estimated number of jobs facilitated: South Africa: , Rest of SADC: Disbursements per sector Disbursements per client Social Infrastructure 6% Education 4% Sanitation 3% Water 5% Other 12% Energy 27% Private sector intermediaries 33% Metro's (SA) 7% Secondary municipalities (SA) 11% Under resourced municipalities (SA) 1% Development funds 8% Transportation 15% Roads and drainage 9% ICT 11% Other public 48% 12

13 2006/ / / / / / / / / / / / / / /11 Total Beneficiation and Development Expenditure Over the past few years total beneficiation and development expenditure greatly accelerated in value and number of initiatives During FY2011, 61% (FY2010:67%) of sustainable earnings was distributed on developmental initiatives R million 18,000 Total Beneficiation R million 1,200 Development expenditure R million 600 Development expenditure 16,000 1, ,000 12,000 4,800 8,900 8, , ,000 2,600 6,000 4,000 1,100 6,160 9,306 8,256 8, ,000 3, Development expenditure Loan equity disbursements MIGs unblocked Annual report page(s): 31,32 Development expenditure Sustainable earnings DF Operating expenditure Grants Subsidised lending rates Research expenditure Capacity development Siyenza Manje 13

14 Credit ratings Healthy credit ratings maintained in line with sovereign SovereignEquivalent Ratings Short term Long term Outlook Fitch National F1+(zaf) AAA(zaf) Stable Moody s Foreigncurrency Not rated A3 Stable Standard & Poor s Foreign currency Local currency A2 A1 BBB+ A Stable Stable S&P s affirmation of ratings Strong government support Sound financial management and capitalisation Good access to funding Annual report page(s): 39 14

15 Total assets up 5% to R47 billion. Financial Position Strong Balance Sheet Development loans and equity investments grew 14,8% and 9,9% respectively. The growth in loan and equity disbursements funded mainly by borrowings, which accounts for increasing debt to equity ratio from 149% (2009/10) to 161% (2010/11). Net interest margin of 46% was affected by the lower shortterm interest rates and higher longterm interest rates. R million 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Key Balance Sheet Accounts 47,397 45,056 40,382 37,845 33,246 32,969 29,449 27,878 23,288 20,197 6,655 7,916 8,385 8,923 6,074 2,042 2,548 3,165 3,478 1,026 FY2007 FY2008 FY2009 FY2010 FY % 160% 140% 120% 100% 80% 60% 40% 20% 0% Leveraging the Balance Sheet 88.3% 59.7% 107.6% 66.2% 102.7% 51.2% 53.1% 50.7% 149.2% 95.2% 70.0% 72.9% 161.1% 87.7% 69.2% 45.3% 45.8% FY2007 FY2008 FY2009 FY2010 FY2011 Total assets Equities Annual report page(s): 33 Development loans Liquidity and other assets Net interest margin Debt/Equity (excl callable capital) Fin market liabilities to inv in development loans/equity Debt/Equity (incl callable capital) 15

16 R million Financial Position and Operating Expenditure Sound financial health maintained The total impairment as a % of total book debt increased marginally to 2.3% (2009/10: 2.2%) The nonperforming book debt as a % of total book remains managed at 4.2% (2009/10: 4.9%) despite increased risk. This ratio excluding new loans in the last 12months remains lower than the previous year at 4.6%. Costs well managed and below prudential limit of 45%. Development Loans Costtoincome ratio 40,000 35,000 30,000 25,000 20,000 20,197 23,288 29,449 32,969 37,845 20% 18% 16% 14% 12% 10% 45% 40% 35% 30% 25% 33.8% 33.8% 36.0% 40.5% 41.2% 15,000 10, % 5.2% 5.4% 4.9% 4.2% 8% 6% 4% 20% 15% 10% 5,000 2% 5% FY2007 FY2008 FY2009 FY2010 FY2011 0% 0% FY2007 FY2008 FY2009 FY2010 FY2011 Development Loans NPL % Annual report page(s): 34, 37 16

17 Quarter 1 Financial Results: YTD 30 June 2011 Key Financial Indicators Actual YTD Jun2011 Budget YTD Jun2011 Actual FY 2011 R'm R'm R'm Loans and equity disbursements 2,846 1,658 8,336 Total assets 49,045 47,397 Development loans 38,678 37,845 Equity investments 4,549 3,478 Net interest income ,642 Net (loss)/gain from financial assets and liabilities (13) (399) Personnel expenses (124) (137) (566) General and administration expenses (40) (66) (176) Grants (10) (23) (65) Impairment loss on financial assets (10) (27) (229) Sustainable earnings Profit before transfer to Development Fund Debt to equity ratio (excluding callable capital) 164.3% 161.1% Debt to equity ratio (including callable capital) 78.2% 87.7% Net interest margin 45.1% 41.3% 45.8% Cost to income 36.9% 49.0% 41.2%

18 Quarter 1 Financial Performance: YTD 30 June % The higher net interest income, and management of operating expenses accounted for the favourable cost to income ratio (Actual: 36.9%; Budget: 49%), and sustainable earnings (Actual: R278m; Budget: R190m) 50.0% 40.0% 30.0% 20.0% 10.0% 1, % Cost to income Sustainable Earnings (R'm)

19 Quarter 2 Operating Expenses: YTD 30 Sep 2011 Expenses Actual YTD 30 Sep 2011 (R m) Budget YTD 30 Sep 2011 (R m) Personnel expenses 256,8 274,0 General & admin 70,7 126,8 Depreciation 9,4 11,6 Operating expenses 336,8 412,4

20 Value Chain Providing integrated solutions to foster Centre of Excellence for Infrastructure Delivery Mr Paul Baloyi EXPANDED SCOPE OF DBSA ENTRY POINT (DBSA intervening across most of the valuechain) Dev Planning, Mobilization Partnerships Facilitation 2010: new programme approach and mandate origination Identify Appraise Finance Plan & Procure Construction Management & Monitoring Operate & Maintain Review & Evaluate Policy or sector level, preproject Capital Markets & Commercial Banks New Development Fund Initiation Conventional Development Bank 20

21 Supporting Government as Delivery Agent in priority sectors During FY 2011 MOU s signed with National Departments of Water Affairs, Energy and Health, as well as the Provincial Departments of Health. Planning and scoping commenced. Investigating means of reducing overall costoffunding to optimally support role out of national programmes. Transport Education National mandates Energy Progress during FY 2012 Education: MOU signed and programme in initiation. Energy: OPP Refit Programme in implementation and Energy Efficiency Programme in design phase. Health: Capital projects at six hospitals in the initiation phase. Human Settlements: MOU under negotiation. Transport: MOU signed. Water: Programme in design phase. Water Health Human Settlement 21