Half Year Financial Results201214 August 2012
Agenda● Highlights ● Economic overview ● Financial review● Operational overview ● Strategy and outlook
BancABC Half Year Financial Results 2012HighlightsDOUGLAS MUNATSI
BancABC Half Year Financial Results 2012in BWP June 2012 June 2011 ∆ TrendAttributableProfits55.6m 37.2m +49%Dividend PerS...
BancABC Half Year Financial Results 2012June 2012 June 2011 ∆ TrendPAT BWP55.3m BWP39.1m + 41%ROE 17.8% 17.0% + 0.8%Cost T...
BancABC Half Year Financial Results 2012in BWP June 2012 June 2011 ∆ TrendTotal Assets 10.8 billion 7.4 billion +47%Loans ...
BancABC Half Year Financial Results 2012Operational highlightsTotal retail branchesincreased from 35 in June2011 to 55 in ...
BancABC Half Year Financial Results 2012Economic reviewDOUG MUNATSI
BancABC Half Year Financial Results 2012Economic overview9Globaleconomy is setto grow by3.5% in 2012compared to3.9% in 201...
BancABC Half Year Financial Results 2012Economic overview (cont’d)10Just liketemperaturein Europe,the financialcrisis ishe...
BancABC Half Year Financial Results 2012Economic overview (cont’d)11Sub-Saharan Africa(SSA) is not immuneto the spillovere...
BancABC Half Year Financial Results 2012Fiscal & debt levels in selected countries12050100150200250-14 -12 -10 -8 -6 -4 -2...
BancABC Half Year Financial Results 2012Inflation development - H112137.92.718.76.44.16.002468101214161820%InflationAvg In...
BancABC Half Year Financial Results 2012Policy interest rates14Moz policy rate was lowered from 15%in Feb-12 to 13.5% in J...
BancABC Half Year Financial Results 2012Interest rates landscape – H11215Country Avg. TBYield RateAvg. PrimeLendingRatesAv...
BancABC Half Year Financial Results 2012Exchange rate movement vs. USD16-4 0 4 8 12 16 20BWPZARMZNTZSZMK18.422.6-2.7-1.36....
BancABC Half Year Financial Results 2012ZAR correlation to Euro170.600.650.700.750.800.850.906.57.07.58.08.59.0Jan-10Mar-1...
BancABC Half Year Financial Results 2012Exchange rate movement per Pula18All other ABC currencies appreciated againstthe B...
BancABC Half Year Financial Results 2012Deposits per capita (US$)19kenya371Zambia283Tanzania160Zimbabwe276South Africa6,63...
BancABC Half Year Financial Results 2012Minimum capital requirements200 20 40 60 80 100 120 140 160 180 200AngolaMalawiSA ...
BancABC Half Year Financial Results 2012GDP Size (US$ bn)Minimum Cap & No. Banks21South Africa420Nigeria273Algeria207Angol...
BancABC Half Year Financial Results 2012ABC Markets – Banking Sector Landscape(US$m)2201,0002,0003,0004,0005,0006,0007,000...
BancABC Half Year Financial Results 2012Operational OverviewFRANCIS DZANYA
BancABC Half Year Financial Results 2012BancABC Botswana HighlightsRevenue• NII: +203%• Balance sheetgrowth• Good marginsf...
BancABC Half Year Financial Results 2012BancABC Mozambique HighlightsRevenue• NII: +127%• Balance sheetgrowth• Improvedmar...
BancABC Half Year Financial Results 2012BancABC Tanzania HighlightsRevenue• NII: -38%• Shrinking interestmargins• Non Inte...
BancABC Half Year Financial Results 2012BancABC Zambia HighlightsRevenue• Total income up78% fromBWP45m toBWP80m• Growth i...
BancABC Half Year Financial Results 2012BancABC Zimbabwe HighlightsRevenue• NII: 45% higher• Balance sheetgrowth• Non Inte...
BancABC Half Year Financial Results 2012Financial reviewBEKI MOYO
BancABC Half Year Financial Results 2012Income StatementPerformance driven byincrease in net interestincome and non-intere...
BancABC Half Year Financial Results 2012Income StatementPerformance driven byincrease in net interestincome and non-intere...
BancABC Half Year Financial Results 2012Attributable Profit TrendHigher attributable profitsdriven by increase in coreearn...
BancABC Half Year Financial Results 2012Income Statement- Segmental AnalysisSignificant growth inBotswana and Zambia– cons...
BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis34Strong growth in income other than Tanzania...
BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis35Total income by business and subsidiaryBWP0...
BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis36Total net interest income by business and s...
BancABC Half Year Financial Results 2012Income Statement – Net Interest IncomeOverall Group margins at 6.2%(2011: 6.5%)37P...
BancABC Half Year Financial Results 2012Income Statement – Impairments & NPLs38Gross and net NPL ratiosreduced marginally ...
BancABC Half Year Financial Results 2012Income Statement- Cost to Income39Cost to incomeratio marginally up– retail expans...
BancABC Half Year Financial Results 2012Operating Expense per Entity40-20,00040,00060,00080,000100,000120,000140,000BWP000...
BancABC Half Year Financial Results 2012Income Statement- Opex per entity41Operating expenses (BWP’000)BWP000Jun-12Wholesa...
BancABC Half Year Financial Results 2012Balance Sheet OverviewBalance sheet grew by 18%from BWP9.2 billion inDecember 2011...
BancABC Half Year Financial Results 2012Balance Sheet43BWP 000s Jun -12 Jun-11 % change Dec-11Cash and short term funds 98...
BancABC Half Year Financial Results 2012Balance Sheet- USD44BWP 000s Jun -12 Jun-11 % change Dec-11Cash and short term fun...
BancABC Half Year Financial Results 2012Balance Sheet- Loans and Deposits29% growthin loans sinceDec – 1195% YoY19% increa...
BancABC Half Year Financial Results 2012Balance Sheet – Segmental Analysis46BWP000Jun-12WholesaleJun-11WholesaleJun-12Reta...
BancABC Half Year Financial Results 2012Balance Sheet – Segmental Analysis46% growth in deposits largely driven by Botswan...
BancABC Half Year Financial Results 2012Balance Sheet – Capital AdequacyTotal Capital (BWP m) Capital Adequacy RatioSubsid...
BancABC Half Year Financial Results 2012BancABC Tanzania Challenges49TanzaniaPopulation: 43mGDP size: US$25 bnBanking A...
BancABC Half Year Financial Results 2012Tanzania market analysis50Tanzania remains an attractivemarket• Second largest eco...
BancABC Half Year Financial Results 2012Head office entities51Head office now fundedpredominantly bydividendsSubsidiary di...
BancABC Half Year Financial Results 2012Strategy and OutlookDOUGLAS MUNATSI
BancABC Half Year Financial Results 2012Key successesCompleted rights offer of US$50 millionRecapitalised all banking oper...
BancABC Half Year Financial Results 2012Challenges and resolution processesCapital to support currentgrowth trajectoryLiqu...
BancABC Half Year Financial Results 2012Short to medium term objectivesRaisebetween US$75 - $100million in tierII capitalA...
BancABC Half Year Financial Results 2012Dividend declaration56As per Group Policy, a dividend of 8 thebe (about1 US cent) ...
BancABC Half Year Financial Results 2012THANK YOU57
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June 2012 results

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June 2012 results

  1. 1. Half Year Financial Results201214 August 2012
  2. 2. Agenda● Highlights ● Economic overview ● Financial review● Operational overview ● Strategy and outlook
  3. 3. BancABC Half Year Financial Results 2012HighlightsDOUGLAS MUNATSI
  4. 4. BancABC Half Year Financial Results 2012in BWP June 2012 June 2011 ∆ TrendAttributableProfits55.6m 37.2m +49%Dividend PerShare0.08 0.068 +18%NAV Per Share 4.35 3.09 +41%Group performance is satisfactory setting the group well for the rest of the yearFinancial Highlights
  5. 5. BancABC Half Year Financial Results 2012June 2012 June 2011 ∆ TrendPAT BWP55.3m BWP39.1m + 41%ROE 17.8% 17.0% + 0.8%Cost To Income 75% 72% +3.0%EPS 37.2 thebe 25.9 thebe +44%Profitability improved on the back of increased business volumes across all lines ofbusiness. Expansion into Consumer Lending bearing fruits in Botswana, Zambiaand Zimbabwe. Cost to income still highFinancial Highlights
  6. 6. BancABC Half Year Financial Results 2012in BWP June 2012 June 2011 ∆ TrendTotal Assets 10.8 billion 7.4 billion +47%Loans & Advances 7.8 billion 4.0 billion +95%Deposits 8.8 billion 6.0 billion +46%Equity 636 million 453 million +43%Group total assets have increased steadily mainly in Botswana, Zimbabwe and tolesser extent Zambia. Group total loans grew faster than deposits essentiallyfuelled by Botswana’s book which has grown over 200%Financial Highlights
  7. 7. BancABC Half Year Financial Results 2012Operational highlightsTotal retail branchesincreased from 35 in June2011 to 55 in June 2012Total retail customernumbers increased by 144%from 63,891 in June 2011 to155,763 in June 2012NPLs at 5.4% from 5.5% inJune 2011, credit loss ratiodown from 1.2% in 2011 to0.8% in 2012Raised US $50 million byway of a rights issue in July20127
  8. 8. BancABC Half Year Financial Results 2012Economic reviewDOUG MUNATSI
  9. 9. BancABC Half Year Financial Results 2012Economic overview9Globaleconomy is setto grow by3.5% in 2012compared to3.9% in 2011Weak Globalrecoverydepends onprogress inEurope andUnited StatesGrowthmomentum hasalso slowed invariousemergingmarketeconomies -Brazil, Chinaand IndiaEmergingmarkets havebeen hit byinvestor riskaversion &growthuncertainty
  10. 10. BancABC Half Year Financial Results 2012Economic overview (cont’d)10Just liketemperaturein Europe,the financialcrisis isheating uponce moreEuro areaperipheryeconomies attheepicentre ofescalation infinancialcrisisInvestorsareincreasinglyunsatisfiedwith thesteps takento tacklethe eurocrisisEuro area isexpected toenter into amildrecessionin 2012USeconomicactivitylessrobust
  11. 11. BancABC Half Year Financial Results 2012Economic overview (cont’d)11Sub-Saharan Africa(SSA) is not immuneto the spillovereffects of euro zonecrisisSSA economic growthexpected to be 5.4%in 2012Many SSA countrieshave embarked onpolicy easing tosupport economicgrowth
  12. 12. BancABC Half Year Financial Results 2012Fiscal & debt levels in selected countries12050100150200250-14 -12 -10 -8 -6 -4 -2 0 2GvtDebt,%ofGDPFiscal Balance, % of GDPIrelandGreecePortugal ItalyJapanUKGermanyFranceUSABrazilIndiaRussiaChinaSpainNegative fiscal Balance means budget deficit
  13. 13. BancABC Half Year Financial Results 2012Inflation development - H112137.92.718.76.44.16.002468101214161820%InflationAvg InflationBotswana Mozambique Tanzania Zambia Zimbabwe SAThough declining, inflation remains very high in Tanzania: Highest TZ inflation rate was 19.8 % inDecember of 2011 and record low was 3.4 % in February of 2003,Countries have benefited from lower oil pricesFood inflation has been broadly stable but expected to pick in H2:2012
  14. 14. BancABC Half Year Financial Results 2012Policy interest rates14Moz policy rate was lowered from 15%in Feb-12 to 13.5% in Jun in line withdeclining inflationIn TZ, firming up of overnight rate inH2:2011 was due to tight liquidityconditionsIn ZM, bank rate averaged 9% inH1:2012 compared to 7.7% H1:2011Policy interest rates – key monetarypolicy tools to fight inflationBots Bank rate remained flat at 9.5%05101520253035%Bots (Bank Rate)Zambia (BankRate)Moz (Standing LendingFacility)
  15. 15. BancABC Half Year Financial Results 2012Interest rates landscape – H11215Country Avg. TBYield RateAvg. PrimeLendingRatesAvg.DepositRatesAvg.SpreadBotswana 5.0 11.0 5.9 5.1Mozambique 7.1 18.9 13.2 5.7Tanzania 13.2 13.9 9.9 4.0Zambia 7.0 22.6 7.0 15.6Zimbabwe --- 10 - 30 0.15 - 18 9.85-12
  16. 16. BancABC Half Year Financial Results 2012Exchange rate movement vs. USD16-4 0 4 8 12 16 20BWPZARMZNTZSZMK18.422.6-2.7-1.36.5%YoY: Jun-11 to Jun-12On annual basis thefollowing currenciesdepreciated vs. USD:ZAR: 22.6%BWP: 18.4%ZMK : 6.5%TZS :1.3%MZN appreciated vs.USD by 2.7%ZAR volatility linkedto Euro zone crisisZAR weakness pullingdown BWP
  17. 17. BancABC Half Year Financial Results 2012ZAR correlation to Euro170.600.650.700.750.800.850.906.57.07.58.08.59.0Jan-10Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12Jul-12US$/EuroUS$/ZARUS$/ZARUS$/EuroCorrelation betweenEuro & ZAR is ≈ 0.6Suggesting that ≈ 60%of US$/ZAR movementis explained byUS$/Euro movementHas implications forregional trade
  18. 18. BancABC Half Year Financial Results 2012Exchange rate movement per Pula18All other ABC currencies appreciated againstthe BWPZAR hardest hit emerging market currenciesby risk aversionZMK strength propped up by policies to de-dollarize economy200210220230240250 BWP/TZS3.003.504.004.505.005.50Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12BWP/MZN650670690710730750Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12BWP/ZMK
  19. 19. BancABC Half Year Financial Results 2012Deposits per capita (US$)19kenya371Zambia283Tanzania160Zimbabwe276South Africa6,637Botswana3,103Mozambique20350607080901001100 5 10 15 20 25 30 35 40 45 50LDR,%#of Banks
  20. 20. BancABC Half Year Financial Results 2012Minimum capital requirements200 20 40 60 80 100 120 140 160 180 200AngolaMalawiSA (Mutual Banks)TanzaniaEthiopiaUgandaKenyaZambia (Local Banks)SA (Commercial Banks)Zambia (Foreign Banks)ZimbabweAlgeriaNigeria458101010112039100100142180US$ mSteep CapitalRequirementsfor Banks inZambia &Zimbabwe*** For new applications. Full compliance date for existing banks:Dec 2012 in Zambia and June 2014 in Zimbabwe
  21. 21. BancABC Half Year Financial Results 2012GDP Size (US$ bn)Minimum Cap & No. Banks21South Africa420Nigeria273Algeria207Angola122Kenya42Mozambique15Zimbabwe11Botswana18Tanzania25Zambia21-200204060801001201401601802002205 10 15 20 25 30 35 40 45MinimumCapital,US$mNumber of BanksGDP Size (US$ bn)= Bubble Size
  22. 22. BancABC Half Year Financial Results 2012ABC Markets – Banking Sector Landscape(US$m)2201,0002,0003,0004,0005,0006,0007,00001,0002,0003,0004,0005,0006,0007,000Dec-11Feb-12Apr-12Jun-12Jan-12Mar-12May-12Dec-11Feb-12Apr-12Jun-12Jan-12Mar-12May-12Dec-11Feb-12Apr-12Jun-12US$mUS$mTotal DepositsCredit PvtBotswana Mozambique Tanzania Zambia ZimbabweLDR=65% LDR=74% LDR=74% LDR=56% LDR=90%
  23. 23. BancABC Half Year Financial Results 2012Operational OverviewFRANCIS DZANYA
  24. 24. BancABC Half Year Financial Results 2012BancABC Botswana HighlightsRevenue• NII: +203%• Balance sheetgrowth• Good marginsfrom consumerlending book• Non InterestIncome:+64%• Higher FXtrading incomeLoans andDeposits•Loans:+BWP1.1bn toBWP2.8bn•Impairments:up fromBWP2m toBWP15m•Deposits: +BWP0.9bn toBWP3.5bnOutlook• Consumerlending andgroup schemeloans• 100% homeloans, Visaprepaid cards• Chips and PINcards, ATMsrolledout, VISAacquiring24AnotherGood Run•Ops Stats• Staff: up from 187 (Dec-11) to 211• Branches: 4• Customers: up from 9,177 (Dec-11)to 17,919
  25. 25. BancABC Half Year Financial Results 2012BancABC Mozambique HighlightsRevenue• NII: +127%• Balance sheetgrowth• Improvedmargins amidsttoughcompetition• Non InterestIncome: +32%• Increased FXtrading incomeand tradefinance feesLoans andDeposits• Loans:+BWP65m toBWP827m• Impairments:up from BWP3mto BWP10m• Gross NPLsincreased from4.3% to 7.4%• Deposits: +BWP79m toBWP1.3bnOutlook• Visa prepaidcards• Campaigns ondepositmobilization• IFC SMEProgram• Market interestrates on agradualdownward trend25Satisfactory•Ops Stats•Staff: up from 125(Dec-11) to 144•Branches: 6•Customers: up from 4,516 (Dec-11) to 5,406
  26. 26. BancABC Half Year Financial Results 2012BancABC Tanzania HighlightsRevenue• NII: -38%• Shrinking interestmargins• Non InterestIncome: - 12%• Lower bondtrading volumesLoans andDeposits• Loans: +BWP82mto BWP654m• 13% reduction inImpairmentcharges• Some NPLaccounts stillbeing regularized• Deposits: -BWP86m toBWP975mOutlook• ConsumerLending, acquiredPayroll deductionin July• Card basedproducts• Market interestrates slowlytrendingdownwards26BelowBudget•Ops Stats• Staff: up from 101(Dec-11) to 130• Branches: +1 during H1:12, total to 5• Business volumes still a major constrainton Retail and SME
  27. 27. BancABC Half Year Financial Results 2012BancABC Zambia HighlightsRevenue• Total income up78% fromBWP45m toBWP80m• Growth inconsumer loans• Increased tradefinancetransactionsLoans andDeposits• Loans:+BWP195m toBWP772m• growth mostlyon consumerlending book• NPLs: downfrom 11.6% inJun-11 to 4.5%in Jun-12• Deposits:+BWP65m toBWP613mOutlook• Consumerlending salescampaigns• Rollout of cardproducts27Goodabovebudget•Ops Stats• Staff: up from 187(Dec-11) to 211• Branches: +2 during H1:12, total 21• Customers: up from 52,515 to 62,541
  28. 28. BancABC Half Year Financial Results 2012BancABC Zimbabwe HighlightsRevenue• NII: 45% higher• Balance sheetgrowth• Non InterestIncome: up77% fromincreasedcustomertransactionsLoans andDeposits• Loans:+BWP416m toBWP2.4bn• Significantcollections fromdelinquentaccounts• NPLs: up from2.74% in Jun-11to 5.2% in Jun-12• Deposits:+BWP448m toBWP2.4bnOutlook• Banc Easy,• Group loanschemes,• Mortgage loansand VAF,• SMS bankinglaunched,• Internet/POSacquiring andVISA prepaidcard atadvanced stage28RobustPerformance•Ops Stats• Staff: up from 352 (Dec-11) to 462• Branches: +3 during H1:12 total to19• Customers: up from 52,515 to 65,891
  29. 29. BancABC Half Year Financial Results 2012Financial reviewBEKI MOYO
  30. 30. BancABC Half Year Financial Results 2012Income StatementPerformance driven byincrease in net interestincome and non-interestincome – expansion intoConsumer LendingImpairments higher due toloan growth anddowngrade in Tanzania &MozambiqueOperating expenses higherin line with expansionBWP000 Jun-12 % ∆ Jun-11Net interest income 273,670 43% 191,354Impairment of loans (32,408) -26% (25,821)NII after impairment of loans 241,262 46% 165,533Non-interest income 234,947 61% 145,678Total income 476,209 53% 311,211Operating expenses (379,016) -55% (244,026)Net income from operations 97,193 45% 67,185Share of loss of associates (1,472) 68% (4,546)Profit before tax 95,721 53% 62,639Tax (40,441) -72% (23,529)Profit for the year 55,280 41% 39,110Attributable to:-Ordinary shareholders 55,579 49% 37,242-Minority interests (299) -116% 1,868Basic EPS (thebe) 37.2 44% 25.9Dividend per share (thebe) 8.0 18% 6.830
  31. 31. BancABC Half Year Financial Results 2012Income StatementPerformance driven byincrease in net interestincome and non-interestincome – expansion intoretail spaceImpairments higher due toloan growth and downgradein Tanzania & MozambiqueOperating expenses higherin line with expansionUSD000 Jun-12 % ∆ Jun-11Net interest income 36,909 27% 29,172Impairment of loans (4,371) -11% (3,936)NII after impairment of loans 32,538 29% 25,236Non-interest income 31,686 43% 22,208Total income 64,224 35% 47,444Operating expenses (51,116) -37% (37,201)Net income from operations 13,108 28% 10,243Share of loss of associates (198) 71% (693)Profit before tax 12,910 35% 9,550Tax (5,454) -52% (3,587)Profit for the year 7,456 25% 5,963Attributable to:-Ordinary shareholders 7,497 32% 5,678-Minority interests (41) -114% 285Basic EPS (US cents) 5.0 28% 3.9Dividends per share (US cents) 1.0 0% 1.031
  32. 32. BancABC Half Year Financial Results 2012Attributable Profit TrendHigher attributable profitsdriven by increase in coreearningsROE only marginally higher– loss in Tanzania impactedearningsUpward trend in past 3years supported bysustainable earningsDip in 2009 due todollarization & change inbusiness model32
  33. 33. BancABC Half Year Financial Results 2012Income Statement- Segmental AnalysisSignificant growth inBotswana and Zambia– consumer loansZimbabwe continuedgrowing profitabilityfrom all businesssegmentsTanzania performanceimpacted by lowerinterest margins andhigher impairmentsBWP000 Jun-12 % Cont Jun-11 % Cont % ∆Botswana 35,727 32% 10,883 15% 228%Mozambique 13,816 12% 7,823 11% 77%Tanzania (4,860) -4% 9,941 14% -149%Zambia 16,991 15% 6,200 8% 174%Zimbabwe 49,809 45% 38,422 52% 30%Banking Operations 111,483 100% 73,269 100% 52%Head office & consolidationadjustments (55,904) (36,027) -55%Total 55,579 37,242 49%33Attributable profits
  34. 34. BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis34Strong growth in income other than Tanzania and head office entitiesTotal income by entityBWP000 Jun-12 Jun-11 % ∆ Dec-11BancABC Botswana 109,330 48,460 126% 116,482BancABC Mozambique 70,343 43,171 63% 120,660BancABC Tanzania 33,643 45,376 -26% 55,639BancABC Zambia 80,329 45,248 78% 100,902BancABC Zimbabwe 190,361 112,478 69% 218,943Banking Operations 484,006 294,733 64% 612,626Head office entities (7,797) 16,478 -147% 46,183Total 476,209 311,211 53% 658,809
  35. 35. BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis35Total income by business and subsidiaryBWP000Jun-12WholesaleJun-11WholesaleJun-12RetailJun-11RetailBancABC Botswana 53,564 46,003 55,766 2,457BancABC Mozambique 62,809 39,843 7,534 3,328BancABC Tanzania 29,980 43,860 3,663 1,516BancABC Zambia 23,821 8,708* 56,508 36,540*BancABC Zimbabwe 143,129 88,029 47,232 24,449Banking Operations 313,303 226,443* 170,703 68,290*Head office entities (7,797) 16,478 - -Total 305,506 242,921* 170,703 68,290*150% growth in Retail banking income mainly dueto Botswana, Zambia and Zimbabwe.Retail contribution up from 22% in Jun-11 to 36%in Jun-12.26% growth in Wholesale banking income mainlydue to Botswana, Mozambique and Zimbabwe.Wholesale contribution down from 78% in Jun-11to 64% in Jun-12.* Restated: BancABC Microfin’s total income moved from wholesale into retail
  36. 36. BancABC Half Year Financial Results 2012Income Statement – Segmental Analysis36Total net interest income by business and subsidiaryBWP000Jun-12WholesaleJun-12WholesaleJun-11RetailJun-11RetailBancABC Botswana 42,332 28,562 48,129 1,308BancABC Mozambique 37,882 17,953 8,520 2,514BancABC Tanzania 10,410 23,513 4,923 1,064BancABC Zambia 4,666 2,728 29,170 35,336BancABC Zimbabwe 73,235 57,713 21,822 7,637Banking Operations 168,525 130,469 112,564 47,859Head office entities (7,419) 13,026 - -Total 161,107 143,495 112,564 47,859Growth across allsubsidiaries other thanTanzaniaRetail NII up 135%Wholesale NII up 29%*Retail contribution up to41% from 25%Lower margins inTanzania* Excluding Head office entities
  37. 37. BancABC Half Year Financial Results 2012Income Statement – Net Interest IncomeOverall Group margins at 6.2%(2011: 6.5%)37Positive trend in net interest incomedriven by increased balance sheetsize – growth in Consumer Lending
  38. 38. BancABC Half Year Financial Results 2012Income Statement – Impairments & NPLs38Gross and net NPL ratiosreduced marginally duringthe periodCredit loss ratio declinedfrom 1.2% to 0.8%Increased NPLs inMozambique, Tanzaniaand ZimbabweChange for impairmentsin Botswana highermostly due to increasedloan book size
  39. 39. BancABC Half Year Financial Results 2012Income Statement- Cost to Income39Cost to incomeratio marginally up– retail expansionOn target in theshort to mediumterm Stillmaintained at 50%
  40. 40. BancABC Half Year Financial Results 2012Operating Expense per Entity40-20,00040,00060,00080,000100,000120,000140,000BWP000Jun-08 Jun-09 Jun-10 Jun-11 Jun-12Increase in costs largely driven by retail banking expansion
  41. 41. BancABC Half Year Financial Results 2012Income Statement- Opex per entity41Operating expenses (BWP’000)BWP000Jun-12WholesaleJun-11WholesaleJun-12RetailJun-11RetailBancABC Botswana 35,942 26,388 27,583 10,425BancABC Mozambique 29,375 21,266 21,822 11,678BancABC Tanzania 30,911 25,157 10,129 5,055BancABC Zambia 16,859 36,158 38,364 2,889BancABC Zimbabwe 79,690 44,520 44,370 17,293Banking Operations 192,777 153,489 142,267 47,340Head office entities 36,904 39,402 7,068 3,794Total 229,681 192,891 149,335 51,134Wholesale banking contribution down to 61% from 79%Retail banking contribution up to 39% from 21%Wholesale banking costs up 19%Retail banking costs up 192%
  42. 42. BancABC Half Year Financial Results 2012Balance Sheet OverviewBalance sheet grew by 18%from BWP9.2 billion inDecember 2011 & by 47%from BWP 7.3 billion in June2011 to BWP10.8 billionDeposits grew by 19% fromBWP7.4 billion in December2011 & by 46% from BWP 6.0billion in June 2011 toBWP8.8 billionLoans and advances increased29% from BWP6.1 billion inDecember 2011 & by 95%from BWP 4.0 billion in June2011 to BWP7.8 billion -growth mostly from BotswanaTotal Equity grew by 9% fromBWP613 million in December2011 & by 42% from BWP 469million in June 2011 to BWP666 million42
  43. 43. BancABC Half Year Financial Results 2012Balance Sheet43BWP 000s Jun -12 Jun-11 % change Dec-11Cash and short term funds 988,788 1,356,617 -27% 1,243,431Financial assets held for trading 544,474 1,030,839 -47% 651,049Financial assets designated at fair value 90,053 84,135 7% 185,412Loans and advances 7,817,545 4,018,987 95% 6,077,399Property and equipment 576,491 392,799 47% 514,880Other Investments 352,005 154,046 129% 138,070Prepayments and others assets 453,191 327,815 38% 373,647TOTAL ASSETS 10,822,547 7,365,238 47% 9,183,888Deposits 8,781,462 6,004,301 46% 7,374,700Borrowed funds 1,130,944 682,839 66% 981,788Other liabilities 244,283 208,610 17% 214,833Total liabilities 10,156,689 6,895,750 47% 8,571,321Equity attributable to ordinary shareholders649,903 453,116 43% 596,811Minority interest 15,955 16,372 -3% 15,756Total equity 665,858 469,488 42% 612,567TOTAL EQUITY AND LIABILITIES 10,822,547 7,365,238 47% 9,183,888
  44. 44. BancABC Half Year Financial Results 2012Balance Sheet- USD44BWP 000s Jun -12 Jun-11 % change Dec-11Cash and short term funds 129,185 207,562 -38% 166,122Financial assets held for trading 71,136 157,707 -55% 86,980Financial assets designated at fair value 11,765 12,884 -9% 24,771Loans and advances 1,021,362 614,905 66% 811,940Property and equipment 75,319 60,098 25% 68,788Other Investments 45,990 23,569 95% 18,447Prepayments and others assets 59,209 50,156 18% 49,920TOTAL ASSETS 1,413,966 1,126,881 25% 1,226,968Deposits 1,147,298 918,658 25% 985,260Borrowed funds 147,758 104,474 41% 131,167Other liabilities 31,915 31,917 0% 28,702Total liabilities 1,326,971 1,055,049 26% 1,145,129Equity attributable to ordinary shareholders 84,910 69,327 22% 79,734Minority interest 2,085 2,505 -17% 2,105Total equity 86,995 71,832 21% 81,839TOTAL EQUITY AND LIABILITIES 1,413,966 1,126,881 25% 1,226,968
  45. 45. BancABC Half Year Financial Results 2012Balance Sheet- Loans and Deposits29% growthin loans sinceDec – 1195% YoY19% increasein depositssince Dec-1146% YoY4548% CAGRsince Jun-0840% CAGRsince Jun-08
  46. 46. BancABC Half Year Financial Results 2012Balance Sheet – Segmental Analysis46BWP000Jun-12WholesaleJun-11WholesaleJun-12RetailJun-11RetailBancABC Botswana 1,539,202 825,315 1,228,008 14,490BancABC Mozambique 715,634 500,338 111,174 40,478BancABC Tanzania 587,178 418,976 67,103 22,277BancABC Zambia 253,600 84,602 518,030 201,392BancABC Zimbabwe 1,862,894 1,354,846 586,488 145,817Banking Operations 4,958,508 3,184,077 2,510,803 424,454Head office entities 348,234 410,456 - -Total Loans and Advances 5,306,742 3,594,533 2,510,803 424,454Loans and advances by business and subsidiary492% growth in Retail Loans mainly due toBotswana, Zambia and Zimbabwe.Retail contribution to total Loans and advances upfrom 11% in Jun-11 to 32% in Jun-12.48% growth in Wholesale Loans mainly due toBotswana, Mozambique and Zimbabwe.Wholesale contribution to total Loans and advancesdown from 89% in Jun-11 to 68% in Jun-12.
  47. 47. BancABC Half Year Financial Results 2012Balance Sheet – Segmental Analysis46% growth in deposits largely driven by Botswana and Zimbabwe47BWP000Jun-12WholesaleJun-11WholesaleJun-12RetailJun-11RetailBancABC Botswana 3,236,303 1,929,167 227,454 55,079BancABC Mozambique 1,028,260 822,667 267,209 159,648BancABC Tanzania 927,226 972,753 47,838 14,796BancABC Zambia 585,322 375,629 27,493 18,229BancABC Zimbabwe 2,218,362 990,578 215,995 665,755Total Deposits 7,995,473 5,090,794 785,989 913,50714% decrease in Retail deposits mainly due towithdrawal of a large short term deposit inZimbabwe. Retail contribution to total depositsdown from 15% in Jun-11 to 9% in Jun-12.57% growth in Wholesale deposits mainly due toBotswana, Mozambique and Zimbabwe.Wholesale contribution to total deposits up from85% in Jun-11 to 91% in Jun-12.
  48. 48. BancABC Half Year Financial Results 2012Balance Sheet – Capital AdequacyTotal Capital (BWP m) Capital Adequacy RatioSubsidiary Jun-12 Jun-11 Min Jun-12 Jun-11BancABC Botswana 345 173 15% 15% 20%BancABC Mozambique 249 177 8% 15% 22%BancABC Tanzania 150 132 12% 15% 15%BancABC Zambia 196 89 10% 19% 21%BancABC Zimbabwe 421 216 10% 11% 15%48US $50 million rights offer successfully completed in July 2012However, current business growth entails raising additional capitalPlan is to raise between US $75 - $100 million in tier II capitalZim has new capital reqs and min CAR = 12% effective 1 Aug 2012
  49. 49. BancABC Half Year Financial Results 2012BancABC Tanzania Challenges49TanzaniaPopulation: 43mGDP size: US$25 bnBanking Assets: US$9.8bnBancABC Tanzania recorded a loss ofBWP5 million in current period dueto reduction in interest margins andhigh impairment chargesEntity also had a loss in 2011 ofBWP3.3 million – MTM losses, highimpairmentsEntity was profitable in thepreceding four years prior to 2011Historically Tanzania had low capitallevels, low single obligor limitsHigh NPLs exacerbated by a slowlegal process
  50. 50. BancABC Half Year Financial Results 2012Tanzania market analysis50Tanzania remains an attractivemarket• Second largest economy in East Africa• Between 6%-7% Annual Real GDP growth ratesince 2003• Steady growth in banking assets and liabilities yoy• Larger players dominate the marketBancABC has grown steadily:• BancABC’s CAGR consistently grew faster thanthe market between 2002 and 2011• Capital increased from $1m in 2002 to $20m in2012• Quick resolution of remaining NPLs• Business expansion – wholesale and retail (SMEs,group schemes and consumer lending segment)CAGRTotal MarketCAGRBancABC TZDeposits 17.6% 26.8%Loans 26.4% 36.2%Assets 19.2% 29.5%From 2002 To 2011Top 3 Banks inTanzania BancABC TZ2010 2011 2010 2011Assets 44.50% 39.90% 1.80% 1.70%Deposits 53.60% 48.50% 1.50% 1.70%Loans 44.20% 41.90% 1.70% 1.60%
  51. 51. BancABC Half Year Financial Results 2012Head office entities51Head office now fundedpredominantly bydividendsSubsidiary dividends andintra-group interesteliminated on consolidationManagement fees (full costre-charge) discontinuedafter 2008Income in 2012 lower dueto reduction in liquidity andincreased liabilities tocapitalize subsidiariesahead of completion oright s issueImproved subsidiariesperformance to lead tobetter funding for H/OBalance sheet restructuringto lead to increasedliquidity and incomeTax losses in ABCHcompany to be utilized asfar as possible
  52. 52. BancABC Half Year Financial Results 2012Strategy and OutlookDOUGLAS MUNATSI
  53. 53. BancABC Half Year Financial Results 2012Key successesCompleted rights offer of US$50 millionRecapitalised all banking operations asplannedExpanded retail outlets across footprintand introduced retail products/functionalityGrown retail to profitability in Botswana,Zambia and ZimbabweExpanded wholesale business in alloperations53
  54. 54. BancABC Half Year Financial Results 2012Challenges and resolution processesCapital to support currentgrowth trajectoryLiquidity to fund businessexpansionHigh impairmentsHigh costs54Raising additional capitalArranging lines of credit at centreand subsidiary levelIn process of resolving all key NPLaccountsTo stabilize costs and hence reducecost to income ratio
  55. 55. BancABC Half Year Financial Results 2012Short to medium term objectivesRaisebetween US$75 - $100million in tierII capitalAdditionalcapital forBotswanaandZimbabweExpand retailin TanzaniaandMozambiqueContinueincreasingretail outletsImproveliquidity forthe Groupthroughadditionallines ofcredit andother formsof funding55
  56. 56. BancABC Half Year Financial Results 2012Dividend declaration56As per Group Policy, a dividend of 8 thebe (about1 US cent) per share to be paid on 21 Sep 2012to shareholders on register on 7 Sep 2012
  57. 57. BancABC Half Year Financial Results 2012THANK YOU57

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