FCMB/CSL Investors Conference Presentation to Analysts and Investors www.stanbicibtcbank.com
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 2
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 3
SIBTC: Key facts about us Brief History o The Standard Bank Group (SBG) merged its Nigerian operations, Stanbic Bank Nigeria (SBN) with that of IBTC Chartered Bank PLC (IBTC) on 24 September 2007. o The merger, by way of the first ever tender offer in Nigeria and a $525 million FDI, the largest in Nigerian financial history, gave birth to a new entity now known as Stanbic IBTC Bank PLC (SIBTC). o SBN was created in 1992 when SBG acquired ANZ Grindlays operations in Botswana, Ghana, Kenya, Nigeria, Uganda, Zaire, Zambia and Zimbabwe. SBN offered merchant banking services. o Investment Banking & Trust Company (IBTC) was established 22 years ago to offer investment banking and investment management services. o IBTC merged with Chartered Bank and Regent Bank in 2005 and was thereafter known as IBTC Chartered Bank PLC - a universal bank. o At the time of the merger with Stanbic Bank Nigeria, IBTC Chartered Bank PLC investment bank in Nigeria. was the leading o SIBTC is listed on The Nigerian Stock Exchange. o SBG holds 51.2% of SIBTC listed stock, the remainder is widely held. SIBTC has over 100,000 shareholders. 4
SIBTC: Key facts about us Parent company: Standard Bank Group established in 1862 with presence in 17 African countries and 16 countries outside Africa No of employees: Over 2,000 staff across the group Listing: Listed on The Nigerian Stock Exchange Auditors: KPMG Professionals Credit rating: Fitch: AAA (nga) Channels: 162 branches 200 ATMs Market capitalisation (Aug. 2011): N172.1billion ($1.1 billion) Business units: Personal & Business Banking Corporate & Investment Banking Wealth Management Recognitions in 2010: o Best Brokerage House, EMEA Finance Award o Stock Broker of the Year, Finance Monthly Magazine Global Award o Best Investment Bank in Nigeria, Euromoney Award o Best Issuing House in Africa, African Bankers Award o Best Sub Custodian in Nigeria, Global Finance Award o Best Investment Bank in Nigeria, EMEA Finance Award o Best Custodian in Nigeria, Global Custodian Emerging Market Award o Bank of the Year in Africa, ACQ Global Award 5
Key facts about us Our footprint 28 31 25 Delta (11) 22 30 24 29 34 14 27 13 11 7 37 21 20 19 2 26 23 8 15 5 12 10 17 1 33 1 4 33 18 32 6 35 16 36 3 9 >10 branches 2-10 branches 1 branch Map code State Total 1 Abia 4 2 Abuja 11 3 Adamawa 1 4 Akwa Ibom 1 5 Anambra 3 6 Bauchi 1 7 Bayelsa 1 8 Benue 3 9 Borno 1 10 Cross River 3 11 Delta 3 12 Ebonyi 1 13 Edo 3 14 Ekiti 1 15 Enugu 1 16 Gombe 1 17 Imo 1 18 Jigawa 1 19 Kaduna 11 Map Code State Total 20 Kano 5 21 Katsina 1 22 Kebbi 1 23 Kogi 1 24 Kwara 1 25 Lagos 58 26 Nasarawa 1 27 Niger 3 28 Ogun 6 29 Ondo 2 30 Osun 3 31 Oyo 15 32 Plateau 1 33 Rivers 8 34 Sokoto 1 35 Taraba 1 36 Yobe 1 37 Zamfara 1 Total 162 Continued focus on organic growth by implementing the Hub and Spoke branch expansion model to ensure cost efficiency and speed in roll-out. Branches are targeted at economic centers and the unbanked or underbanked sector of the economy e.g. the traders market. Grew branch network to 162 as at August 2011 from 70 at the beginning of 2010. Now present in all the states of the country. 6
Key facts about us Our competitive advantage People - Experienced and sound board and management team - One vision and value system - Highly skilled and experienced local and international professional workforce - Strong parentage - Member of Standard Bank Group, Africa's largest Bank in assets and earnings - Leverage off customers, skills and best practices - Chinese linkage through ICBC Services & Products - System uptime in excess of 99% and user friendly technology - Service excellence 3rd in KPMG customer satisfaction survey 2011 - True Universal bank Robust capital - Capital adequacy ratio in excess of 25% - Sufficient capital to drive business growth Strong Liquidity - Liquidity ratio is in excess of 30% - Strong funding base as deposit covers 50% of assets - Liquid balance sheet Risk Management -Based on international and Standard Bank Group best practices - Robust corporate governance structure and culture - Enterprise-wide risk management systems - Prudent management of risk assets - - AAA (nga) rating by Fitch 7
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 8
SIBTC corporate structure Stanbic IBTC Bank PLC ( Stanbic IBTC ) is a universal bank listed on The Nigerian Stock Exchange engaging in banking and non-banking activities Stanbic IBTC has several subsidiaries and licences held at both Stanbic IBTC and subsidiary levels Current group structure Stanbic Africa Holdings Ltd Minorities Listed on The Nigerian Stock Exchange 51.2% 48.8% Stanbic IBTC 70.6% 99.9% 99.9% 99.9% 99.9% 99.9% Stanbic IBTC Pension Managers Ltd Stanbic IBTC Trustees Ltd Stanbic Nominees Nigeria Ltd Stanbic IBTC Stockbrokers Ltd Stanbic IBTC Asset Mgt. Ltd Stanbic IBTC Ventures Ltd 9
SIBTC structure: business segments Stanbic IBTC Bank Group Corporate & Investment Banking Personal & Business Banking Wealth Global markets Mortgage lending Pension management Investment banking Instalment sale & finance leases Asset management Transactional products and services Card products Trustee services Transactional products Non asset backed lending 10
Governance structure SIBTC board Shareholders Credit committee Remuneration committee (REMCO) Nomination committee Risk management committee Audit committee Executive committee Credit committee Country risk committee Board committee Statutory committee Management committee IT steering committee (program of works) Operational risk & compliance committee Investment committee Career management committee New & Compliance products committee Committee Credit Risk management committee Asset & liability committee (ALCO) Personal & Business Banking exco Corporate & Investment Banking exco Business support exco Wealth Equity exco Committee Credit Committee 11
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 12
Business overview Corporate and Investment Banking Responsible for all aspects of corporate and investment banking services to large corporates, financial institutions and international counterparties. Global Markets Investment Banking Transactional Products & Services o Money markets; o Foreign exchange; o Interest rate sales & structuring; and o Equities and stockbroking. o Advisory; o Project finance; o Structured finance; o Corporate lending; o Primary markets; o Acquisition finance; o Property finance; and o Equity investments. o Investor services; and o Transactional banking 13
Overview of Corporate & Investment Banking (CIB) Investment Banking Global Markets Transactional Products & Services Strategic Advice Primary Market Access Leverage Products & Complex Derivatives Core Banking & Basic Derivatives Franchise Products Transactional Products Client Base Market leader in: - Global Markets - Domestic Advisory - Custody - Project Finance - Leveraged & Acquisition Finance - Stockbroking business - Cross border champion Industry leader: - Capital Markets development - Risk management practices Business Enablers 14
CIB - Key achievements Maintained dominance in stock broking business with market share of over 25%. Grew holdings under custody by 35% year-on-year to N598.3 billion ($3.86 billion) at end of June 2011 and continued to maintain our leadership in non-pension asset custody business. Maintained market leadership in project finance, investment banking and global markets businesses. Thought leadership actively participating in developing and deepening the Nigerian capital market and infrastructure financing. Appointed as one of the licensed Money Market & Fixed Income Custodians. Growth in commissions and fees driven by increased advisory activities within the investment banking unit and increased transaction volumes and activities. Growth in asset book in a highly competitive operating environment. Reduction in credit impairment charges and non-performing loans through improvement in asset quality and collection capabilities. 15
Business overview Personal & Business Banking Banking, investment, insurance and other financial services to individuals and small-to-medium-sized enterprises Non asset backed lending Transactional products Card products Mortgage lending Instalment sale and finance leases o Personal loans to individuals and businesses o Includes deposit taking activities, electroni c banking and cheque accounts utilising various contact channels o Debit and credit card solutions to individuals and businesses o Home loans to individual customers o Installment finance in the consumer market, and finance of vehicles and equipment in the business market 16
Overview of Personal & Business Banking (PBB) Wealth Advisory Wealth Products Simple Insurance Products & Complex Lending Products Number of: Branches (July 2011):162 (Jan. 2010:70) ATM s (July 2011): 200 (Jan 2010:132) Service levels ranked 3 rd (2010 : 9 th ) by KPMG Professionals Market leader in ATM uptime Simple Lending Products Investment & Savings (Savings & Term Deposits) Transactional & Short Term Liability (Current & Transactional) Innovation leader - Hub & Spoke branch strategy - Trader solution Personal - Client Base - Business Business Enablers 17
PBB - Key achievements December 2010 June 2011 587,609 674,190 Customers 141 162 Branches 132 ATMs 200 N72.2 billion ($466.1 million) Liability growth N94.6 billion ($610.7 million) N57.3 billion ($369.9 million) Risk assets growth N74.9 billion ($488.5 million) 9th KPMG service ratings 3rd
Business overview Wealth The business unit focuses on private non-pension asset management, pension fund administration (PFA) and trusteeship services. The non-pension asset management is managed through Stanbic IBTC Asset Management Limited, while pension fund administration & management is managed through Stanbic IBTC Pension Managers Limited and trustee business is managed through Stanbic IBTC Trustees Limited. 100% owned Asset Management Limited Non-Pension Asset Management o Mutual Funds o Portfolio Management o Investment Advisory Services o Scheme Administration 100% owned Trustee Services Limited Stanbic IBTC Wealth Division 70.59% owned Pension Managers Limited Pension Asset Management o Pension Investment Management o Pension Administration 19
Wealth - Key achievements Maintained clear market leadership in pension and asset management businesses measured by either assets under management or number of individual clients Grew asset under management by 34% to N653.1 billion ($4.22 billion) in June 2011 from N487.4 billion ($3.15 billion) in June 2010 Increased retirement savings accounts to 860,155 in June 2011, representing a 10% growth over 779,917 recorded in June 2010. Introduced two fixed income funds Stanbic IBTC Money Market and Stanbic IBTC Bond Funds. Obtained all regulatory approvals for the establishment of a trusteeship business Stanbic IBTC Trustees Limited. The company commenced operations in 2011. Closer working relationship with the bank to improve overall share of wallet from each customer. Established a robust distribution platform by leveraging on the increased footprint to drive customer acquisition and improve service levels. 20
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 21
Summarised group income statement June 2011 Nmillion change % June 2010 Nmillion Gross earnings 32,197 13 28,376 Interest income 19,355 6 18,200 Interest expense (4,442) 6 (4,205) Net interest income 14,913 7 13,995 Non interest revenue: 12,668 25 10,101 Net fee & commission income 10,247 16 8,828 Foreign exchange revenue 2,017 68 1,203 Other income 404 >100 70 Operating income 27,581 14 24,096 Less: Credit impairment charges (228) 23 (186) Operating expenses (20,736) 25 (16,599) Profit before tax 6,617 (9) 7,311 Tax (1,885) (7) (2,017) Profit after tax 4,732 (11) 5,294 22
Summarised balance sheets 30 June 2011 Change 31 December 2010 N million % N million Assets Cash and balances with central banks 46,654 >100 10,048 Treasury bills 10,716 (14) 12,428 Due from other banks 30,585 (66) 88,659 Loans and advances to customers 194,593 19 163,952 Advances under finance lease 19,722 46 13,502 Investment securities 76,810 61 47,585 Deferred tax assets 904 (4) 939 Other assets 14,433 (11) 16,176 Property and equipment 30,542 (2) 3,252 Total assets 424,959 11 384,541 Liabilities Customer deposits 212,219 14 186,4660 Due to other banks 55,201 (2) 56,1524 Other borrowings 23,319 28 18,272 Other liabilities 46,820 37 34,220 Current income tax 5,224 24 4,197 Deferred tax liabilities 95 (12) 108 Total liabilities 342,878 15 299,415 Equity Share Capital 9,375-9,375 Reserves 71,332 74,375 Shareholders' funds 80,707 (4) 83,750 Minority interest 1,374 (0) 1,376 Liabilities and equity 424,959 11 384,541 23
Business segment performance review Gross revenue by business unit
H1 2011 results - Key performance indicators Net interest margin (annualised) - 7.0% (June 2010: 8.3%) Cost to income ratio - 75.2% (June 2010: 68.9%) Pre- tax return on equity (annualised) - 16.1% (June 2010: 18.2%) After-tax return on equity (annualised) - 11.5% (June 2010: 12.6%) Pre- tax return on assets (annualised) - 3.3% (June 2010: 4.0%) Non-interest revenue to total income - 45.9% (June 2010: 41.9%) Credit loss ratio - 0.1% (December 2010: 0.3%) NPL/total loan - 6.3% (December 2010: 7.6%) Capital adequacy ratio - 25.9% (statutory minimum: 10%) Loan / deposit ratio - 104.6% (December 2010: 100.4%) Price to book - 2.1x (December 2010: 2.0x)
Contents Stanbic IBTC: Key facts about us SIBTC structure and governance framework Business overview H1 2011 financial performance Strategy overview 26
What we are building Cross border & FDI advisory World Class Full Service Domestic Franchise Portfolio flows, risk manageme nt products Strategic Advice Wealth Advisory Offshore Private Banking & Wealth Project, str uctured & leveraged finance Primary Market Access Leverage Products & Complex Derivatives Wealth Products Simple Insurance Products & Complex Lending Transactional & Short Term Liability (Current & Transactional) Personal - Client Base - Business Business Enablers
Key strategic imperatives Core strategy to build a scalable domestic universal banking franchise remains unchanged. Continue to build the Stanbic IBTC brand synonymous with integrity, excellent service and reliability. Capitalise on and maintain our market leadership position in Corporate Finance, Custody & Wealth Management. Leverage our new footprint to expand our share of wallet within Personal & Business Banking with a key focus to improve our deposit mix. Enhance operational efficiency through cost management & control shared services, core banking project. Leverage technology to grow our cash management capabilities and broaden our market penetration. Broaden term funding base for both naira and dollars and continue to responsibly grow the risk asset book. Focus on trade & commercial banking to further grow our annuity income. Leverage the China and emerging market franchise of Standard Bank to capture cross-border opportunities. Best people practices. 28
Key areas of focus Revenue generation Deposit liabilities in the right mix Operational efficiency - cost management Retail banking sweating the huge investment Excellent customer service
Prospects Strategically, we are well positioned for growth: Strong capital base to support planned growth and take advantage of business opportunities both organic and inorganic; Existing Enterprise Risk Management framework; Market leader in investment banking and wealth businesses; Talented people local and international professionals; Robust corporate governance structure and culture; Achieved critical mass in respect of our footprint and now have representation in all the 36 states; Recognised as a customer service leader in the market; Strong parentage - member of Africa s largest bank; and Technology base that can deliver efficiency and service enhancement. We are excited about the future 30
Q & A 31