ABC Holdings Limited FY 2013 financial results presentation

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ABC Holdings Limited FY 2013 financial results presentation

  1. 1. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 2 AGENDA Highlights Economic Review Operational Overview Financial Review Strategy & Prospects
  2. 2. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 3 Highlights ABCH Group CEO, Mr. Doug Munatsi
  3. 3. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 4 Financial Highlights BWP’ million % Change Dec-13 Dec-12 Attributable profits 49% 198 133 Profit after tax 29% 174 135 ROE - 15.3% 15.3% Cost to income 5% 66% 71% EPS (thebe) 10% 79.6 72.1 Dividend per share (thebe) 16% 18.5 16 NAV per share (thebe) 16% 5.64 4.88 Attributable profits up with impressive growth in Botswana, Zambia and Zimbabwe Resilient performance amidst liquidity challenges in most jurisdictions Cost to income ratio down due to higher revenues
  4. 4. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 5 Financial highlights BWP % Change Dec-13 Dec-12 Total assets 18% 15,784 13,408 Loans and advances 15% 10,555 9,144 Deposits 14% 12,209 10,675 Total equity 27% 1,450 1,137 Measured growth in both loans and advances, driven by both retail banking and wholesale banking
  5. 5. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 6 Financial highlights Strong growth in NAV on the back of retained profits as well as conversion of IFC debt to equity in April 2013 399 422 597 1,137 1,450 2.73 2.93 4.01 4.88 5.64 - 1.00 2.00 3.00 4.00 5.00 6.00 0 200 400 600 800 1000 1200 1400 1600 2009 2010 2011 2012 2013 Net Asset Value (BWP m) and NAV per share (BWP) Net asset value Net asset value per share
  6. 6. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 7 Economic Review ABCH Group CEO, Mr. Doug Munatsi
  7. 7. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 8 Economic Growth by Region 3.7 2.8 1.0 6.7 3.3 6.1 3.4 2.3 0.4 6.9 3.4 5.4 -2 0 2 4 6 8 -2 0 2 4 6 8 11 12 13 14 11 12 13 14 11 12 13 14 11 12 13 14 11 12 13 14 11 12 13 14 GDP Growth Avg Growth World US Euro Developing Asia MENA SSA
  8. 8. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 9 Global • Economic recovery continues to gather pace • Mature Economies on a recovery path Developed economies • Euro zone to return to positive growth • Uptick in US economy Emerging countries • Slow down in growth in China • Negative impact on commodities • Currency depreciations - impact of US QE Sub-Saharan Africa • Economic growth to remain strong • Increased public infrastructure spending • Euro bond Issuances Economic Overview
  9. 9. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 10 Economic Growth in ABC Markets BancABC Botswana •Elections in Oct- 14 •Middle income with GDP per Capita of US$7,200 •Relocation of diamond sorting to Botswana BancABC Mozambique •Elections in Oct- 14 •Political disturbances with opposition •Strong growth prospects & leading FDI recipient BancABC Tanzania •Elections in 2015 •Among fastest growing economies in Africa •Low GDP per Capita US$730 BancABC Zambia •Strong economic growth •Trade Surpluses •Rising GDP per Capita US$1,650 BancABC Zimbabwe •Politically stable after elections •Stuttering growth after double digit growth in 2010- 12 •Huge liquidity challenges •FDI to remain low
  10. 10. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 11 GDP Growth in ABC Markets 3,000 4,000 5,000 6,000 7,000 8,000 -8 -6 -4 -2 0 2 4 6 8 10 2009 2010 2011 2012 2013 2014 GDP in Botswana GDP per Capita GDP Growth % Growth US$ Capita 200 300 400 500 600 700 800 6.0 6.5 7.0 7.5 8.0 8.5 9.0 2009 2010 2011 2012 2013 2014 GDP in Mozambique GDP per Capita GDP Growth % Growth US$ Capita
  11. 11. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 12 GDP Growth in ABC Markets (cont’d) 200 300 400 500 600 700 800 5.0 5.5 6.0 6.5 7.0 7.5 8.0 2009 2010 2011 2012 2013 2014 GDP in Tanzania GDP per Capita GDP Growth % Growth US$ Capita 200 600 1,000 1,400 1,800 5.8 6.3 6.8 7.3 7.8 2009 2010 2011 2012 2013 2014 GDP in Zambia GDP per Capita GDP Growth % Growth US$ Capita
  12. 12. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 13 GDP Growth in ABC Markets (cont’d) 200 400 600 800 1,000 1,200 2 4 6 8 10 12 14 2009 2010 2011 2012 2013 2014 GDP in Zimbabwe GDP per Capita GDP Growth % Growth US$ Capita 0 2,000 4,000 6,000 8,000 10,000 -3 -2 -1 1 2 3 4 5 2009 2010 2011 2012 2013 2014 GDP in South Africa GDP per Capita GDP Growth % Growth US$ Capita
  13. 13. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 14 2013 Inflation Rates in ABC Markets (%) 5.9 4.2 7.9 7.0 1.6 5.8 0 2 4 6 8 10 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 TanzaniaMozambiqueBotswana Zambia Zimbabwe South Africa Inflation either stable or declining!
  14. 14. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 15 Policy Interest Rates Policy Rates Dec-12 % Dec-13 % Change Since Dec-11 Comment Botswana Bank Rate 9.5 7.5 (2.00) Lower inflation allowed Bank of Botswana to reduce Bank rate (BR) BR lowered 4-times in 2013 Mozambique Standing Lending Facility 9.5 8.25 (1.25) Loose monetary policy stance. The SLF lowered 3-times during the year Tanzania 91-dy 11.89 13.61 1.72 Higher interest yields despite declining inflation Zambia Policy Rate 9.25 9.75 0.50 Monetary policy tightening in response to rising inflation
  15. 15. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 16 Lending & Deposit Interest Rates Interest Rates Average lending rate % Average deposit rate % Spread Comment Botswana 10.21 4.91 5.30 Monetary policy transmission is working Lending & deposit rates have both come down in line with falling Bank rate Mozambique 20.09 9.68 10.41 Interest rates have not responded significantly despite the policy rate being aggressively reduced over the years Tanzania 14.02 11.34 2.68 Narrowed Interest rate spread reflecting improved financial deepening Zambia 16.3 6.3 10.0 There is pressure to reduce rates which remain stubbornly high Zimbabwe 20.0 8.0 12.0 High interest spread still exists Liquidity squeeze keeping interest rates high
  16. 16. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 17 Exchange Rate Movement vs. USD 0 4 8 12 16 20 24 BWP ZAR MZN TZS ZMK 12 23 1.5 -0.1 7.1 % YoY: Dec-12 to Dec-13 Depreciation vs. USD The Following currencies depreciated vs USD: •ZAR; 23% •BWP; 12% •ZMW; 7% ZAR weighed down by: ● Labour unrests ● Widening current account deficit ● US Quantitative Easing MZN Stable assisted by Central Bank Interventions
  17. 17. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 18 Exchange Rate Movement vs. ZAR All currencies appreciated vs. ZAR: •TZS; 18.8% •MZN; 17.6% •ZMW; 13.6% • BWP; 8.8% Lower imported inflation from SA • SA more prone to global shocks due to closer links with Euro-20 -15 -10 -5 0 BWP MZN TZS ZMK -8.8 -17.6 -18.8 -13.6 % YoY: Dec-12 to Dec- 13 Appreciation vs. ZAR
  18. 18. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 19 Sizes of Banking Systems in ABC Markets 5,798 6,046 8,328 3,825 4,790 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 Nov-12 Feb-13 May-13 Aug-13 Dec-12 Mar-13 Jun-13 Sep-13 Jan-13 Apr-13 Jul-13 Oct-13 Nov-12 Feb-13 May-13 Aug-13 Jan-13 Apr-13 Jul-13 Oct-13 US$m US$m Total Deposits Credit Pvt Botswana Mozambique Tanzania Zambia 2013 2013 2013 2013 2013 Zimbabwe
  19. 19. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 * Jun-13 0% 2% 4% 6% 8% 10% 12% Bots Moz Tanz Zam Zim 2013 market share Deposits Loans Total assets 20 BancABC Market Share Growing market share in Botswana & Zimbabwe Need to grow critical mass in other markets 0% 2% 4% 6% 8% 10% 12% Bots Moz Tanz Zam Zim 2012 market share Deposits Loans Total assets
  20. 20. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 21 ABCH Group COO, Mr. Francis Dzanya Operational Overview
  21. 21. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 22 Group Highlights Staff Clients Channels Comm unities The banking group created 191 jobs in all subsidiaries Total client numbers up by 48% to 277,383 BWP10.5bn Total loans and BWP12.2bn Total deposits Total branches up by 12 to 73 Total ATMs at 74 Increased community participation and sponsorships (Dynamos, Highlanders, Zebras, Green Buffaloes…)
  22. 22. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 23 Botswana Highlights Income statement •PAT increased from BWP94m to BWP153m •NII up 55% to BWP391m •NIR up by 30% to BWP94m Statistics •Staff complement at 284, up from 234 •Increased branches from 5 to 8 •Increased customer numbers from 28,735 to 42,421 Loans & deposits •Loans increased from BWP3.4bn to BWP3.8bn •Deposits increased from BWP4.3bn to BWP4.7bn •Consumer loans make up 61% of total loans Outlook •Focus on deposit mobilization and diversification of the depositor book •Grow non interest income
  23. 23. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 24 Mozambique Highlights Income statement •PAT dropped from BWP18m to BWP9m •High impairment charge from BWP18m last year to BWP51m in 2013 •Fee income grew from BWP26m to BWP48m Statistics •Staff complement at 205, up from 166 •Increased branches from 8 to 10 •Increased customer numbers from 6,448 to 11,168 Loans & deposits •Loans increased from BWP876m to BWP1.4 bn •Deposits increased from BWP1.4bn to BWP2.3bn •Some in-roads made in retail loans and deposits Outlook •Grow loans and deposits •Expansion in number of branches •Tight control of impairments
  24. 24. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 25 Tanzania Highlights Statistics •Staff complement at 212, up from 135 •Branches remained at 4, added 4 loan centers •Increased customer numbers from 6,813 to 21,644 Outlook •Focus on growing consumer loans •Grow deposit base •Control impairments •Manage expenses Income statement •Disappointing set of results, losses at BWP20m •Operating expenses increased faster than annuity income •NIR increased from BWP 54m to BWP68m •Combined impairments of BWP136m and loss of BWP94m Loans & deposits •Loans dropped from BWP747m to BWP575m •Deposits increased from BWP1.2bn to BWP1.3bn •Loans transferred to TDFL at BWP 282m book value
  25. 25. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 26 Zambia Highlights Statistics •Staff complement at 221, up from 211 •Branches increased to 22 from 21 •Increased customer numbers from 62,541 to 88,137 Loans & deposits •Loans increased from BWP1bn to BWP1.4bn •Deposits increased from BWP834m to BWP1.2bn •Loans and deposits were boosted by increased capital which is now BWP825m Outlook •Bank met central bank capital regulations in Dec 2013 •Leverage additional capital and grow loans and deposits •Management of costs key going forward Income statement •PAT increased from BWP36m to BWP50m •Impressive growth in non interest revenue up from BWP110m to BWP158m •NPLs well managed – recovered BWP7.8m •Cost to income ratio at 62%
  26. 26. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 27 Zimbabwe Highlights Statistics •Staff complement at 514 from 507 •Increased branches from 21 to 25 •Increased customer numbers from 84,156 to 114,847 Loans & deposits •Loans increased from BWP3.0bn to BWP3.1bn •Deposits dropped from BWP3.1m to BWP2.7bn but increased from half year position of BWP 2.3bn Income statement •PAT increased from BWP103m to BWP118m •NII up 78% to BWP404m •Impairment charge doubled to BWP92m compared to 2012 Outlook •Focus on growing retail and consumer lending •Grow deposit base and sweat the retail investment •Effective cost management •Reduce NPLs
  27. 27. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 28 ABCH Group CFO, Mr. Beki Moyo Financial Review
  28. 28. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 29 Income statement- BWP BWP‘ million % Change 2013 2012 Net interest income 50 1,010 673 Impairments (137) (328) (138) NII after impairments 28 682 535 Non interest revenue 25 692 552 Operating expenses (29) (1,116) (869) Share of associate results 29 (4) (6) Profit before taxation 20 254 212 Taxation (3) (80) (77) Profit for the year 29 174 135 Attributable to -ordinary shareholders 49 198 133 -minority shareholders (1108) (24) 2 Solid performance hampered by significant rise in impairments of loans Impressive growth in both NII and NIR
  29. 29. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 30 Income Statement- USD USD‘ million % Change 2013 2012 Net interest income 35 119 88 Impairments (113) (39) (18) NII after impairments 15 80 70 Non interest revenue 13 82 73 Operating expenses (15) (132) (114) Share of associate results 36 (0.5) (0.7) Profit before taxation 7 30 28 Taxation 7 (9) (10) Profit for the year 16 21 18 Attributable to -ordinary shareholders 34 24 18 -minority shareholders (1005) (3) 0.3 Solid performance hampered by significant rise in impairments of loans Impressive growth in both NII and NIR
  30. 30. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 31 Positive trend in NAV Continued growth in NAV on the back of retained profits as well as new shares issued 399 422 597 1,137 1,450 2.73 2.93 4.01 4.88 5.64 - 1.00 2.00 3.00 4.00 5.00 6.00 0 200 400 600 800 1000 1200 1400 1600 2009 2010 2011 2012 2013 Net Asset Value (BWP m) and NAV per share (BWP) Net asset value Net asset value per share
  31. 31. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 32 Strong performance 58 67 83 133 198 14% 16% 16% 15% 15% 13% 14% 14% 15% 15% 16% 16% 17% 0 50 100 150 200 250 2009 2010 2011 2012 2013 Profit (BWP m) and ROE (%) Attributable profit ROE Impressive growth in attributable profits over the past 5 years ROE flat due to increase in shareholder funds on the back of retention of profits coupled with share conversion by IFC in 1H-2013.
  32. 32. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 33 Attributable profits per entity BancABC Bots 49% BancABC Moz 3% BancABC Tanz (6%) BancABC Zam 16% BancABC Zim 38% 2013 PAT 94 18 (39) 36 103 153 9 (20) 50 118 (50) - 50 100 150 200 BancABC Botswana BancABC Mozambique BancABC Tanzania BancABC Zambia BancABC Zimbabwe Dec-12 Dec-13 2012 and 2013 PAT
  33. 33. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 34 Net interest income 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 2009 2010 2011 2012 2013 BWP'000 Net int BWP'000 NIM before impairments NIM after impairments Phenomenal growth in net interest income – up by 50% NIM before impairment increased to 7.7% but down to 5.2 % after factoring in impairments
  34. 34. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 35 Net interest income per entity NII boosted by consumer lending in Botswana and Zimbabwe Zambia NII affected by capping of interest rates by the Government Tanzania contribution low due to lower loan book Botswana 37% Mozambique 12% Tanzania 4% Zambia 8% Zimbabwe 39%
  35. 35. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 36 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 2009 2010 2011 2012 2013 Creditlossratio NPLratios NPL and credit loss ratios Gross NPL ratio Net NPL ratio Credit loss ratio Credit loss ratios Gross NPL increased marginally from 9.2% to 9.8% in 2013 However, net NPLs down to 4.8% from 6.1% in 2012 More aggressive provisioning saw credit loss ratio increase to an all time high of 3.3%
  36. 36. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 37 Impairments and credit loss ratio Impairments high with increased non-performing loans Significant provisions made in Tanzania, Zimbabwe and Mozambique 51 16 80 138 328 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% - 50 100 150 200 250 300 350 2009 2010 2011 2012 2013 BWP'million Impairments Impairments Credit loss ratio
  37. 37. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 38 Asset quality and impairments BWP’ million 2013 2012 2011 2010 2009 Gross loans 11,166 9,460 6,295 3,217 2,130 Non-performing loans 1,118 875 418 268 204 Impairments 611 316 218 138 135 Portfolio impairments 94 78 45 17 13 Specific impairments 517 238 173 121 122 Impairment charge 324 138 80 16 51 NPL as a % of gross loans 9.8% 9.2% 6.6% 8.2% 9.6% Credit loss ratio 3.3% 1.8% 1.7% 0.6% 2.4% Implied loss given default 45% 27% 41% 45% 60% NPL coverage ratio at 55% up from 36% in prior year
  38. 38. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 39 Asset quality per business class Per segment Gross loans NPL NPL ratio Corporate lending 5,382 923 17.1% Consumer & retail lending 4,711 141 3.0% Instalment finance 670 46 6.9% Mortgage lending 349 7 2.1% Commercial & property finance 54 1 1.0% Total 11,166 1,118 10% Substantial NPLs in Corporate Lending Relatively good quality in Instalment Finance, Retail and Consumer Lending as well as Mortgage Lending
  39. 39. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 40 Impairment per entity Significant impairments recorded in Zimbabwe, Mozambique and Tanzania The 3 entities accounted for 82% of impairment for the year 5 customers account for 73% of the impairments 42 51 9 7 92 127 BancABC Botswana BancABC Mozambique BancABC Tanzania BancABC Zambia BancABC Zimbabwe Head office entities
  40. 40. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 41 What we are doing to address impairments Improving credit management from granting to collection Reducing single obligor limits Improving documentation Increasing security so that loss given default is lower More reliance on cash flows and less on security Regimented approach to credit management Creation of special operations to manage delinquent accounts Character, character, character
  41. 41. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 42 Non Interest Revenue (100,000) - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 2009 2010 2011 2012 2013 BWP'000 Fees and commissions Trading income Gains on investment activities MTM - investment property Other income Good momentum in non interest revenue, with commissions and fees boosted by consumer banking activities Resilient growth in trading income despite shrinking margins across subsidiaries
  42. 42. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 43 Non interest revenue per entity BWP‘ million % change 2013 2012 BancABC Botswana 30 94 72 BancABC Mozambique 32 89 67 BancABC Tanzania 27 68 54 BancABC Zambia 44 158 110 BancABC Zimbabwe (7) 197 212 Banking operations 18 606 515 Head office entities 126 86 38 Non interest Revenue 25 692 553 With the exception of BancABC Zimbabwe, all entities recorded impressive growth in NIR
  43. 43. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 44 Operating costs and cost to income ratio Cost to income ratio trending downwards on the back of increased income Operating expenses higher due to increased number of staff and branches 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% - 200 400 600 800 1,000 1,200 2009 2010 2011 2012 2013 BWP'million Opex (BWP'million) Cost to Income Ratio (%)
  44. 44. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 45 Operating expenses per category Staff costs constitute 39% of total operating expenses - 200 400 600 800 1,000 1,200 2009 2010 2011 2012 2013 BWP'million Staff costs Administrative costs IT Depreciation Premises Marketing 29%
  45. 45. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 46 Staff numbers by entity Major contributor to costs, staff numbers up 15% from 1,310 in 2012 to 1,501 in 2013 234 166 135 211 507 57 284 205 212 221 514 65 0 100 200 300 400 500 600 Botswana Mozambique Tanzania Zambia Zimbabwe ABCH Human Capital 2012 2013
  46. 46. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 47 Operating Expenses per Entity BWP‘ million % Change 2013 2012 BancABC Botswana 49 246 166 BancABC Mozambique 27 146 115 BancABC Tanzania 30 128 98 BancABC Zambia 18 148 126 BancABC Zimbabwe 30 350 270 Banking operations 31 1,018 775 Head office entities 3 98 94 Total Operating expenses 28 1,116 869 Increase across all entities due to increased activities as a result of additional branches and higher staff numbers
  47. 47. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 48 Balance Sheet- BWP % Change Dec-13 Dec-12 Cash & cash equivalents 24 2,304 1,859 Financial assets 24 1,617 1,301 Loans & advances 15 10,555 9,144 Property & equipment 11 887 798 Other assets 38 421 306 Total assets 18 15,784 13,408 Deposits 14 12,209 10,675 Borrowed funds 45 1,759 1,213 Other liabilities 1 368 364 Ordinary shareholders equity 27 1,450 1,137 Minority interest (110) (2) 19 Total liabilities & equity 18 15,784 13,408 Continued to strengthen our balance sheet, growth of 18% Progress on loans & advances Deposit mobilization a key focus area Increased cash and short term funds Strong capital footing
  48. 48. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 49 Balance sheet- USD % Change Dec-13 Dec-12 Cash & cash equivalents 10 263 239 Financial assets 10 184 168 Loans & advances 2 1,203 1,177 Property & equipment (2) 101 103 Other assets 22 48 39 Total assets 4 1,799 1,726 Deposits 1 1,392 1,374 Borrowed funds 29 201 156 Other liabilities (17) 41 48 Ordinary shareholders equity 13 165 146 Minority interest (109) (0.2) 2 Total liabilities & equity 4 1,799 1,726 Continued to strengthen our balance sheet, growth of 4% Progress on loans & advances Deposit a key focus area Increased cash and short term funds Strong capital footing Depreciation of BWP affected USD numbers
  49. 49. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 50 Balance sheet Growth recorded on all interest earning asset categories. Overall 18% up Loans up by 15%, whilst cash and liquid assets grew by 24% 1,859 2,304 1,301 1,617 9,144 10,555 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2012 2013 BWP'million Total Earning Assets Cash & cash equivalents Financial assets Loans & advances
  50. 50. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 51 Balance sheet 18% increase in interest bearing liabilities (deposits, up 14% and 45% increase in borrowed funds) 10,675 12,209 1,213 1,759 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2012 2013 BWP'million Liabilities Deposits Borrowed funds
  51. 51. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 52 Loans per entity BWP‘ million Dec-13 Dec-12 % change 5 yr CAGR BancABC Botswana 3,750 3,411 10 57% BancABC Mozambique 1,471 877 68 40% BancABC Tanzania 575 747 (23) 4% BancABC Zambia 1,390 1,034 34 47% BancABC Zimbabwe 3,074 2,981 3 136% Banking entities 10,260 9,050 13 53% Head office entities 295 94 209 28% Total loans 10,555 9,144 15% 52% Significant growth registered in Mozambique and Zambia Tanzania loan book regressed, after transfer of loans to TDFL accounted for in “Head office entities”
  52. 52. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 53 Loans and advances BWP' million Dec-13 Dec-12 % Change Corporate lending 5,382 4,612 17 Consumer & retail lending 4,711 3,965 19 Instalment finance 670 561 19 Mortgage lending 349 268 30 Commercial & property finance 54 54 - Gross loans & advances 11,166 9,460 18 Less: Credit impairments (611) (316) 93 Net loans & advances 10,555 9,144 15 Growth registered in Corporate lending as well as consumer lending Corporate lending contributed 48% to total loans and advances Consumer loans contribution at 42%, up from 41% in 2012
  53. 53. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 54 Deposits BWP'million Dec-13 Dec-12 % change 5 yr CAGR BancABC Botswana 4,726 4,262 11 35% BancABC Mozambique 2,321 1,355 71 30% BancABC Tanzania 1,298 1,148 13 18% BancABC Zambia 1,155 835 38 53% BancABC Zimbabwe 2,709 3,075 (12) 81% Total deposits 12,209 10,675 14 38% With the exception of BancABC Zimbabwe strong growth registered across the board. Notably in BancABC Mozambique and BancABC Zambia Zimbabwe decreased by 12%, but picked up after 1H-2013 Impressive growth in retail deposits with BancABC Botswana and BancABC Mozambique leading the way Wholesale deposits at 88% continue to contribute significantly to total deposits
  54. 54. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 55 Well capitalized banking operations BancABC Zambia and BancABC Zimbabwe met the stringent capital requirements; BancABC Tanzania capitalized in July 2013 and CAR at 13.18% which is within regulatory threshold of 12% 686 291 197 825 748 19% 15% 13% 57% 16% 0% 10% 20% 30% 40% 50% 60% - 100 200 300 400 500 600 700 800 900 BancABC Botswana BancABC Mozambique BancABC Tanzania BancABC Zambia BancABC Zimbabwe BWP'million Capital Adequacy Ratio Capital CAR (US$ 33m) (US$ 23m) (US$ 94m) (US$ 85m) (US$ 78m)
  55. 55. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 56 Strategy & Prospects ABCH Group CEO, Mr. Doug Munatsi
  56. 56. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 Complete retail branches roll out and increase alternative channels through partnerships Raise tier I capital of US$100m Increase minimum capital in each subsidiary to between US$50m and US$100m by 2015 Arrange credit lines of US$200m to US$300m Target cost to income ratio of under 50%, in all banking operations by 2015 Grow market share to 5% -10% in all banking operations by 2015 57 Short to medium term objectives Market share Costs Funding Channels
  57. 57. BancABC Annual Financial Results 2013 Presentation March 25-26 2014 58 Dividend Declaration In accordance with Group Policy, a dividend of 4.5 thebe (0.5 US cent) to be paid on 2 May 2014 to shareholders on the register on 18 April 2014 Total dividend for the year will be 18.5 thebe (2012: 16 thebe) which is approximately 2.1 cents (2012: 2.1 US cents)

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