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June 2012 results

BancABC reported strong financial results for the first half of 2012. Key highlights included a 49% increase in attributable profits, 41% increase in total assets, and 95% growth in loans and advances. The group's performance was driven by increased business volumes across all lines, particularly in consumer lending. Looking ahead, BancABC aims to continue expanding consumer lending and rolling out new digital banking services to sustain its momentum.

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Half Year Financial Results 2012 14 August 2012
Agenda ● Highlights ● Economic overview ● Financial review ● Operational overview ● Strategy and outlook
BancABC Half Year Financial Results 2012 Highlights DOUGLAS MUNATSI
BancABC Half Year Financial Results 2012 in BWP June 2012 June 2011 ∆ Trend Attributable Profits 55.6m 37.2m +49% Dividend Per Share 0.08 0.068 +18% NAV Per Share 4.35 3.09 +41% Group performance is satisfactory setting the group well for the rest of the year Financial Highlights
BancABC Half Year Financial Results 2012 June 2012 June 2011 ∆ Trend PAT 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 of business. Expansion into Consumer Lending bearing fruits in Botswana, Zambia and Zimbabwe. Cost to income still high Financial Highlights
BancABC Half Year Financial Results 2012 in BWP June 2012 June 2011 ∆ Trend Total 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 to lesser extent Zambia. Group total loans grew faster than deposits essentially fuelled by Botswana’s book which has grown over 200% Financial Highlights
BancABC Half Year Financial Results 2012 Operational highlights Total retail branches increased from 35 in June 2011 to 55 in June 2012 Total retail customer numbers increased by 144% from 63,891 in June 2011 to 155,763 in June 2012 NPLs at 5.4% from 5.5% in June 2011, credit loss ratio down from 1.2% in 2011 to 0.8% in 2012 Raised US $50 million by way of a rights issue in July 2012 7
BancABC Half Year Financial Results 2012 Economic review DOUG MUNATSI
BancABC Half Year Financial Results 2012 Economic overview 9 Global economy is set to grow by 3.5% in 2012 compared to 3.9% in 2011 Weak Global recovery depends on progress in Europe and United States Growth momentum has also slowed in various emerging market economies - Brazil, China and India Emerging markets have been hit by investor risk aversion & growth uncertainty
BancABC Half Year Financial Results 2012 Economic overview (cont’d) 10 Just like temperature in Europe, the financial crisis is heating up once more Euro area periphery economies at the epicentre of escalation in financial crisis Investors are increasingly unsatisfied with the steps taken to tackle the euro crisis Euro area is expected to enter into a mild recession in 2012 US economic activity less robust
BancABC Half Year Financial Results 2012 Economic overview (cont’d) 11 Sub-Saharan Africa (SSA) is not immune to the spillover effects of euro zone crisis SSA economic growth expected to be 5.4% in 2012 Many SSA countries have embarked on policy easing to support economic growth
BancABC Half Year Financial Results 2012 Fiscal & debt levels in selected countries 12 0 50 100 150 200 250 -14 -12 -10 -8 -6 -4 -2 0 2 GvtDebt,%ofGDP Fiscal Balance, % of GDP Ireland Greece Portugal Italy Japan UK GermanyFrance USA Brazil India Russia China Spain Negative fiscal Balance means budget deficit
BancABC Half Year Financial Results 2012 Inflation development - H112 13 7.9 2.7 18.7 6.4 4.1 6.0 0 2 4 6 8 10 12 14 16 18 20 % Inflation Avg Inflation Botswana Mozambique Tanzania Zambia Zimbabwe SA Though declining, inflation remains very high in Tanzania: Highest TZ inflation rate was 19.8 % in December of 2011 and record low was 3.4 % in February of 2003, Countries have benefited from lower oil prices Food inflation has been broadly stable but expected to pick in H2:2012
BancABC Half Year Financial Results 2012 Policy interest rates 14 Moz policy rate was lowered from 15% in Feb-12 to 13.5% in Jun in line with declining inflation In TZ, firming up of overnight rate in H2:2011 was due to tight liquidity conditions In ZM, bank rate averaged 9% in H1:2012 compared to 7.7% H1:2011 Policy interest rates – key monetary policy tools to fight inflation Bots Bank rate remained flat at 9.5% 0 5 10 15 20 25 30 35 % Bots (Bank Rate) Zambia (Bank Rate) Moz (Standing Lending Facility)
BancABC Half Year Financial Results 2012 Interest rates landscape – H112 15 Country Avg. TB Yield Rate Avg. Prime Lending Rates Avg. Deposit Rates Avg. Spread Botswana 5.0 11.0 5.9 5.1 Mozambique 7.1 18.9 13.2 5.7 Tanzania 13.2 13.9 9.9 4.0 Zambia 7.0 22.6 7.0 15.6 Zimbabwe --- 10 - 30 0.15 - 18 9.85-12
BancABC Half Year Financial Results 2012 Exchange rate movement vs. USD 16 -4 0 4 8 12 16 20 BWP ZAR MZN TZS ZMK 18.4 22.6 -2.7 -1.3 6.5 % YoY: Jun-11 to Jun-12 On annual basis the following currencies depreciated vs. USD: ZAR: 22.6% BWP: 18.4% ZMK : 6.5% TZS :1.3% MZN appreciated vs. USD by 2.7% ZAR volatility linked to Euro zone crisis ZAR weakness pulling down BWP
BancABC Half Year Financial Results 2012 ZAR correlation to Euro 17 0.60 0.65 0.70 0.75 0.80 0.85 0.90 6.5 7.0 7.5 8.0 8.5 9.0 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 US$/Euro US$/ZAR US$/ZAR US$/Euro Correlation between Euro & ZAR is ≈ 0.6 Suggesting that ≈ 60% of US$/ZAR movement is explained by US$/Euro movement Has implications for regional trade
BancABC Half Year Financial Results 2012 Exchange rate movement per Pula 18 All other ABC currencies appreciated against the BWP ZAR hardest hit emerging market currencies by risk aversion ZMK strength propped up by policies to de- dollarize economy 200 210 220 230 240 250 BWP/TZS 3.00 3.50 4.00 4.50 5.00 5.50 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 BWP/MZN 650 670 690 710 730 750 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 BWP/ZMK
BancABC Half Year Financial Results 2012 Deposits per capita (US$) 19 kenya 371 Zambia 283 Tanzania 160 Zimbabwe 276 South Africa 6,637 Botswana 3,103 Mozambique 203 50 60 70 80 90 100 110 0 5 10 15 20 25 30 35 40 45 50 LDR,% #of Banks
BancABC Half Year Financial Results 2012 Minimum capital requirements 20 0 20 40 60 80 100 120 140 160 180 200 Angola Malawi SA (Mutual Banks) Tanzania Ethiopia Uganda Kenya Zambia (Local Banks) SA (Commercial Banks) Zambia (Foreign Banks) Zimbabwe Algeria Nigeria 4 5 8 10 10 10 11 20 39 100 100 142 180 US$ m Steep Capital Requirements for Banks in Zambia & Zimbabwe * * * For new applications. Full compliance date for existing banks: Dec 2012 in Zambia and June 2014 in Zimbabwe
BancABC Half Year Financial Results 2012 GDP Size (US$ bn) Minimum Cap & No. Banks 21 South Africa 420 Nigeria 273 Algeria 207 Angola 122 Kenya 42 Mozambique 15 Zimbabwe 11 Botswana 18 Tanzania 25 Zambia 21 -20 0 20 40 60 80 100 120 140 160 180 200 220 5 10 15 20 25 30 35 40 45 MinimumCapital,US$m Number of Banks GDP Size (US$ bn) = Bubble Size
BancABC Half Year Financial Results 2012 ABC Markets – Banking Sector Landscape (US$m) 22 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Dec-11 Feb-12 Apr-12 Jun-12 Jan-12 Mar-12 May-12 Dec-11 Feb-12 Apr-12 Jun-12 Jan-12 Mar-12 May-12 Dec-11 Feb-12 Apr-12 Jun-12 US$m US$m Total Deposits Credit Pvt Botswana Mozambique Tanzania Zambia Zimbabwe LDR=65% LDR=74% LDR=74% LDR=56% LDR=90%
BancABC Half Year Financial Results 2012 Operational Overview FRANCIS DZANYA
BancABC Half Year Financial Results 2012 BancABC Botswana Highlights Revenue • NII: +203% • Balance sheet growth • Good margins from consumer lending book • Non Interest Income: +64% • Higher FX trading income Loans and Deposits •Loans: +BWP1.1bn to BWP2.8bn •Impairments: up from BWP2m to BWP15m •Deposits: + BWP0.9bn to BWP3.5bn Outlook • Consumer lending and group scheme loans • 100% home loans, Visa prepaid cards • Chips and PIN cards, ATMs rolled out, VISA acquiring 24 Another Good Run •Ops Stats • Staff: up from 187 (Dec-11) to 211 • Branches: 4 • Customers: up from 9,177 (Dec-11) to 17,919
BancABC Half Year Financial Results 2012 BancABC Mozambique Highlights Revenue • NII: +127% • Balance sheet growth • Improved margins amidst tough competition • Non Interest Income: +32% • Increased FX trading income and trade finance fees Loans and Deposits • Loans: +BWP65m to BWP827m • Impairments: up from BWP3m to BWP10m • Gross NPLs increased from 4.3% to 7.4% • Deposits: + BWP79m to BWP1.3bn Outlook • Visa prepaid cards • Campaigns on deposit mobilization • IFC SME Program • Market interest rates on a gradual downward trend 25 Satisfactory •Ops Stats •Staff: up from 125(Dec-11) to 144 •Branches: 6 •Customers: up from 4,516 (Dec- 11) to 5,406
BancABC Half Year Financial Results 2012 BancABC Tanzania Highlights Revenue • NII: -38% • Shrinking interest margins • Non Interest Income: - 12% • Lower bond trading volumes Loans and Deposits • Loans: +BWP82m to BWP654m • 13% reduction in Impairment charges • Some NPL accounts still being regularized • Deposits: - BWP86m to BWP975m Outlook • Consumer Lending, acquired Payroll deduction in July • Card based products • Market interest rates slowly trending downwards 26 Below Budget •Ops Stats • Staff: up from 101(Dec-11) to 130 • Branches: +1 during H1:12, total to 5 • Business volumes still a major constraint on Retail and SME
BancABC Half Year Financial Results 2012 BancABC Zambia Highlights Revenue • Total income up 78% from BWP45m to BWP80m • Growth in consumer loans • Increased trade finance transactions Loans and Deposits • Loans: +BWP195m to BWP772m • growth mostly on consumer lending book • NPLs: down from 11.6% in Jun-11 to 4.5% in Jun-12 • Deposits:+ BWP65m to BWP613m Outlook • Consumer lending sales campaigns • Rollout of card products 27 Good above budget •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
BancABC Half Year Financial Results 2012 BancABC Zimbabwe Highlights Revenue • NII: 45% higher • Balance sheet growth • Non Interest Income: up 77% from increased customer transactions Loans and Deposits • Loans: +BWP416m to BWP2.4bn • Significant collections from delinquent accounts • NPLs: up from 2.74% in Jun-11 to 5.2% in Jun- 12 • Deposits:+ BWP448m to BWP2.4bn Outlook • Banc Easy, • Group loan schemes, • Mortgage loans and VAF, • SMS banking launched, • Internet/POS acquiring and VISA prepaid card at advanced stage 28 Robust Performance •Ops Stats • Staff: up from 352 (Dec-11) to 462 • Branches: +3 during H1:12 total to 19 • Customers: up from 52,515 to 65,891
BancABC Half Year Financial Results 2012 Financial review BEKI MOYO
BancABC Half Year Financial Results 2012 Income Statement Performance driven by increase in net interest income and non-interest income – expansion into Consumer Lending Impairments higher due to loan growth and downgrade in Tanzania & Mozambique Operating expenses higher in line with expansion BWP'000 Jun-12 % ∆ Jun-11 Net interest income 273,670 43% 191,354 Impairment of loans (32,408) -26% (25,821) NII after impairment of loans 241,262 46% 165,533 Non-interest income 234,947 61% 145,678 Total income 476,209 53% 311,211 Operating expenses (379,016) -55% (244,026) Net income from operations 97,193 45% 67,185 Share of loss of associates (1,472) 68% (4,546) Profit before tax 95,721 53% 62,639 Tax (40,441) -72% (23,529) Profit for the year 55,280 41% 39,110 Attributable to: -Ordinary shareholders 55,579 49% 37,242 -Minority interests (299) -116% 1,868 Basic EPS (thebe) 37.2 44% 25.9 Dividend per share (thebe) 8.0 18% 6.8 30
BancABC Half Year Financial Results 2012 Income Statement Performance driven by increase in net interest income and non-interest income – expansion into retail space Impairments higher due to loan growth and downgrade in Tanzania & Mozambique Operating expenses higher in line with expansion USD'000 Jun-12 % ∆ Jun-11 Net interest income 36,909 27% 29,172 Impairment of loans (4,371) -11% (3,936) NII after impairment of loans 32,538 29% 25,236 Non-interest income 31,686 43% 22,208 Total income 64,224 35% 47,444 Operating expenses (51,116) -37% (37,201) Net income from operations 13,108 28% 10,243 Share of loss of associates (198) 71% (693) Profit before tax 12,910 35% 9,550 Tax (5,454) -52% (3,587) Profit for the year 7,456 25% 5,963 Attributable to: -Ordinary shareholders 7,497 32% 5,678 -Minority interests (41) -114% 285 Basic EPS (US cents) 5.0 28% 3.9 Dividends per share (US cents) 1.0 0% 1.0 31
BancABC Half Year Financial Results 2012 Attributable Profit Trend Higher attributable profits driven by increase in core earnings ROE only marginally higher – loss in Tanzania impacted earnings Upward trend in past 3 years supported by sustainable earnings Dip in 2009 due to dollarization & change in business model 32
BancABC Half Year Financial Results 2012 Income Statement- Segmental Analysis Significant growth in Botswana and Zambia – consumer loans Zimbabwe continued growing profitability from all business segments Tanzania performance impacted by lower interest margins and higher impairments BWP'000 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 & consolidation adjustments (55,904) (36,027) -55% Total 55,579 37,242 49% 33 Attributable profits
BancABC Half Year Financial Results 2012 Income Statement – Segmental Analysis 34 Strong growth in income other than Tanzania and head office entities Total income by entity BWP'000 Jun-12 Jun-11 % ∆ Dec-11 BancABC Botswana 109,330 48,460 126% 116,482 BancABC Mozambique 70,343 43,171 63% 120,660 BancABC Tanzania 33,643 45,376 -26% 55,639 BancABC Zambia 80,329 45,248 78% 100,902 BancABC Zimbabwe 190,361 112,478 69% 218,943 Banking Operations 484,006 294,733 64% 612,626 Head office entities (7,797) 16,478 -147% 46,183 Total 476,209 311,211 53% 658,809
BancABC Half Year Financial Results 2012 Income Statement – Segmental Analysis 35 Total income by business and subsidiary BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 53,564 46,003 55,766 2,457 BancABC Mozambique 62,809 39,843 7,534 3,328 BancABC Tanzania 29,980 43,860 3,663 1,516 BancABC Zambia 23,821 8,708* 56,508 36,540* BancABC Zimbabwe 143,129 88,029 47,232 24,449 Banking 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 due to Botswana, Zambia and Zimbabwe. Retail contribution up from 22% in Jun-11 to 36% in Jun-12. 26% growth in Wholesale banking income mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution down from 78% in Jun-11 to 64% in Jun-12. * Restated: BancABC Microfin’s total income moved from wholesale into retail
BancABC Half Year Financial Results 2012 Income Statement – Segmental Analysis 36 Total net interest income by business and subsidiary BWP'000 Jun-12 Wholesale Jun-12 Wholesale Jun-11 Retail Jun-11 Retail BancABC Botswana 42,332 28,562 48,129 1,308 BancABC Mozambique 37,882 17,953 8,520 2,514 BancABC Tanzania 10,410 23,513 4,923 1,064 BancABC Zambia 4,666 2,728 29,170 35,336 BancABC Zimbabwe 73,235 57,713 21,822 7,637 Banking Operations 168,525 130,469 112,564 47,859 Head office entities (7,419) 13,026 - - Total 161,107 143,495 112,564 47,859 Growth across all subsidiaries other than Tanzania Retail NII up 135% Wholesale NII up 29%* Retail contribution up to 41% from 25% Lower margins in Tanzania * Excluding Head office entities
BancABC Half Year Financial Results 2012 Income Statement – Net Interest Income Overall Group margins at 6.2% (2011: 6.5%) 37 Positive trend in net interest income driven by increased balance sheet size – growth in Consumer Lending
BancABC Half Year Financial Results 2012 Income Statement – Impairments & NPLs 38 Gross and net NPL ratios reduced marginally during the period Credit loss ratio declined from 1.2% to 0.8% Increased NPLs in Mozambique, Tanzania and Zimbabwe Change for impairments in Botswana higher mostly due to increased loan book size
BancABC Half Year Financial Results 2012 Income Statement- Cost to Income 39 Cost to income ratio marginally up – retail expansion On target in the short to medium term Still maintained at 50%
BancABC Half Year Financial Results 2012 Operating Expense per Entity 40 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 BWP'000 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Increase in costs largely driven by retail banking expansion
BancABC Half Year Financial Results 2012 Income Statement- Opex per entity 41 Operating expenses (BWP’000) BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 35,942 26,388 27,583 10,425 BancABC Mozambique 29,375 21,266 21,822 11,678 BancABC Tanzania 30,911 25,157 10,129 5,055 BancABC Zambia 16,859 36,158 38,364 2,889 BancABC Zimbabwe 79,690 44,520 44,370 17,293 Banking Operations 192,777 153,489 142,267 47,340 Head office entities 36,904 39,402 7,068 3,794 Total 229,681 192,891 149,335 51,134 Wholesale 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%
BancABC Half Year Financial Results 2012 Balance Sheet Overview Balance sheet grew by 18% from BWP9.2 billion in December 2011 & by 47% from BWP 7.3 billion in June 2011 to BWP10.8 billion Deposits grew by 19% from BWP7.4 billion in December 2011 & by 46% from BWP 6.0 billion in June 2011 to BWP8.8 billion Loans and advances increased 29% from BWP6.1 billion in December 2011 & by 95% from BWP 4.0 billion in June 2011 to BWP7.8 billion - growth mostly from Botswana Total Equity grew by 9% from BWP613 million in December 2011 & by 42% from BWP 469 million in June 2011 to BWP 666 million 42
BancABC Half Year Financial Results 2012 Balance Sheet 43 BWP '000s Jun -12 Jun-11 % change Dec-11 Cash and short term funds 988,788 1,356,617 -27% 1,243,431 Financial assets held for trading 544,474 1,030,839 -47% 651,049 Financial assets designated at fair value 90,053 84,135 7% 185,412 Loans and advances 7,817,545 4,018,987 95% 6,077,399 Property and equipment 576,491 392,799 47% 514,880 Other Investments 352,005 154,046 129% 138,070 Prepayments and others assets 453,191 327,815 38% 373,647 TOTAL ASSETS 10,822,547 7,365,238 47% 9,183,888 Deposits 8,781,462 6,004,301 46% 7,374,700 Borrowed funds 1,130,944 682,839 66% 981,788 Other liabilities 244,283 208,610 17% 214,833 Total liabilities 10,156,689 6,895,750 47% 8,571,321 Equity attributable to ordinary shareholders 649,903 453,116 43% 596,811 Minority interest 15,955 16,372 -3% 15,756 Total equity 665,858 469,488 42% 612,567 TOTAL EQUITY AND LIABILITIES 10,822,547 7,365,238 47% 9,183,888
BancABC Half Year Financial Results 2012 Balance Sheet- USD 44 BWP '000s Jun -12 Jun-11 % change Dec-11 Cash and short term funds 129,185 207,562 -38% 166,122 Financial assets held for trading 71,136 157,707 -55% 86,980 Financial assets designated at fair value 11,765 12,884 -9% 24,771 Loans and advances 1,021,362 614,905 66% 811,940 Property and equipment 75,319 60,098 25% 68,788 Other Investments 45,990 23,569 95% 18,447 Prepayments and others assets 59,209 50,156 18% 49,920 TOTAL ASSETS 1,413,966 1,126,881 25% 1,226,968 Deposits 1,147,298 918,658 25% 985,260 Borrowed funds 147,758 104,474 41% 131,167 Other liabilities 31,915 31,917 0% 28,702 Total liabilities 1,326,971 1,055,049 26% 1,145,129 Equity attributable to ordinary shareholders 84,910 69,327 22% 79,734 Minority interest 2,085 2,505 -17% 2,105 Total equity 86,995 71,832 21% 81,839 TOTAL EQUITY AND LIABILITIES 1,413,966 1,126,881 25% 1,226,968
BancABC Half Year Financial Results 2012 Balance Sheet- Loans and Deposits 29% growth in loans since Dec – 11 95% YoY 19% increase in deposits since Dec-11 46% YoY 45 48% CAGR since Jun-08 40% CAGR since Jun-08
BancABC Half Year Financial Results 2012 Balance Sheet – Segmental Analysis 46 BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 1,539,202 825,315 1,228,008 14,490 BancABC Mozambique 715,634 500,338 111,174 40,478 BancABC Tanzania 587,178 418,976 67,103 22,277 BancABC Zambia 253,600 84,602 518,030 201,392 BancABC Zimbabwe 1,862,894 1,354,846 586,488 145,817 Banking Operations 4,958,508 3,184,077 2,510,803 424,454 Head office entities 348,234 410,456 - - Total Loans and Advances 5,306,742 3,594,533 2,510,803 424,454 Loans and advances by business and subsidiary 492% growth in Retail Loans mainly due to Botswana, Zambia and Zimbabwe. Retail contribution to total Loans and advances up from 11% in Jun-11 to 32% in Jun-12. 48% growth in Wholesale Loans mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution to total Loans and advances down from 89% in Jun-11 to 68% in Jun-12.
BancABC Half Year Financial Results 2012 Balance Sheet – Segmental Analysis 46% growth in deposits largely driven by Botswana and Zimbabwe 47 BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 3,236,303 1,929,167 227,454 55,079 BancABC Mozambique 1,028,260 822,667 267,209 159,648 BancABC Tanzania 927,226 972,753 47,838 14,796 BancABC Zambia 585,322 375,629 27,493 18,229 BancABC Zimbabwe 2,218,362 990,578 215,995 665,755 Total Deposits 7,995,473 5,090,794 785,989 913,507 14% decrease in Retail deposits mainly due to withdrawal of a large short term deposit in Zimbabwe. Retail contribution to total deposits down from 15% in Jun-11 to 9% in Jun-12. 57% growth in Wholesale deposits mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution to total deposits up from 85% in Jun-11 to 91% in Jun-12.
BancABC Half Year Financial Results 2012 Balance Sheet – Capital Adequacy Total Capital (BWP m) Capital Adequacy Ratio Subsidiary Jun-12 Jun-11 Min Jun-12 Jun-11 BancABC 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% 48 US $50 million rights offer successfully completed in July 2012 However, current business growth entails raising additional capital Plan is to raise between US $75 - $100 million in tier II capital Zim has new capital reqs and min CAR = 12% effective 1 Aug 2012
BancABC Half Year Financial Results 2012 BancABC Tanzania Challenges 49 Tanzania Population: 43m GDP size: US$25 bn Banking Assets: US$9.8bn BancABC Tanzania recorded a loss of BWP5 million in current period due to reduction in interest margins and high impairment charges Entity also had a loss in 2011 of BWP3.3 million – MTM losses, high impairments Entity was profitable in the preceding four years prior to 2011 Historically Tanzania had low capital levels, low single obligor limits High NPLs exacerbated by a slow legal process
BancABC Half Year Financial Results 2012 Tanzania market analysis 50 Tanzania remains an attractive market • Second largest economy in East Africa • Between 6%-7% Annual Real GDP growth rate since 2003 • Steady growth in banking assets and liabilities yoy • Larger players dominate the market BancABC has grown steadily: • BancABC’s CAGR consistently grew faster than the market between 2002 and 2011 • Capital increased from $1m in 2002 to $20m in 2012 • Quick resolution of remaining NPLs • Business expansion – wholesale and retail (SMEs, group schemes and consumer lending segment) CAGR Total Market CAGR BancABC TZ Deposits 17.6% 26.8% Loans 26.4% 36.2% Assets 19.2% 29.5% From 2002 To 2011 Top 3 Banks in Tanzania BancABC TZ 2010 2011 2010 2011 Assets 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%
BancABC Half Year Financial Results 2012 Head office entities 51 Head office now funded predominantly by dividends Subsidiary dividends and intra-group interest eliminated on consolidation Management fees (full cost re-charge) discontinued after 2008 Income in 2012 lower due to reduction in liquidity and increased liabilities to capitalize subsidiaries ahead of completion o right s issue Improved subsidiaries performance to lead to better funding for H/O Balance sheet restructuring to lead to increased liquidity and income Tax losses in ABCH company to be utilized as far as possible
BancABC Half Year Financial Results 2012 Strategy and Outlook DOUGLAS MUNATSI
BancABC Half Year Financial Results 2012 Key successes Completed rights offer of US$50 million Recapitalised all banking operations as planned Expanded retail outlets across footprint and introduced retail products/functionality Grown retail to profitability in Botswana, Zambia and Zimbabwe Expanded wholesale business in all operations 53
BancABC Half Year Financial Results 2012 Challenges and resolution processes Capital to support current growth trajectory Liquidity to fund business expansion High impairments High costs 54 Raising additional capital Arranging lines of credit at centre and subsidiary level In process of resolving all key NPL accounts To stabilize costs and hence reduce cost to income ratio
BancABC Half Year Financial Results 2012 Short to medium term objectives Raise between US $75 - $100 million in tier II capital Additional capital for Botswana and Zimbabwe Expand retail in Tanzania and Mozambique Continue increasing retail outlets Improve liquidity for the Group through additional lines of credit and other forms of funding 55
BancABC Half Year Financial Results 2012 Dividend declaration 56 As per Group Policy, a dividend of 8 thebe (about 1 US cent) per share to be paid on 21 Sep 2012 to shareholders on register on 7 Sep 2012
BancABC Half Year Financial Results 2012 THANK YOU 57

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June 2012 results

  • 1.
    Half Year FinancialResults 2012 14 August 2012
  • 2.
    Agenda ● Highlights ●Economic overview ● Financial review ● Operational overview ● Strategy and outlook
  • 3.
    BancABC Half YearFinancial Results 2012 Highlights DOUGLAS MUNATSI
  • 4.
    BancABC Half YearFinancial Results 2012 in BWP June 2012 June 2011 ∆ Trend Attributable Profits 55.6m 37.2m +49% Dividend Per Share 0.08 0.068 +18% NAV Per Share 4.35 3.09 +41% Group performance is satisfactory setting the group well for the rest of the year Financial Highlights
  • 5.
    BancABC Half YearFinancial Results 2012 June 2012 June 2011 ∆ Trend PAT 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 of business. Expansion into Consumer Lending bearing fruits in Botswana, Zambia and Zimbabwe. Cost to income still high Financial Highlights
  • 6.
    BancABC Half YearFinancial Results 2012 in BWP June 2012 June 2011 ∆ Trend Total 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 to lesser extent Zambia. Group total loans grew faster than deposits essentially fuelled by Botswana’s book which has grown over 200% Financial Highlights
  • 7.
    BancABC Half YearFinancial Results 2012 Operational highlights Total retail branches increased from 35 in June 2011 to 55 in June 2012 Total retail customer numbers increased by 144% from 63,891 in June 2011 to 155,763 in June 2012 NPLs at 5.4% from 5.5% in June 2011, credit loss ratio down from 1.2% in 2011 to 0.8% in 2012 Raised US $50 million by way of a rights issue in July 2012 7
  • 8.
    BancABC Half YearFinancial Results 2012 Economic review DOUG MUNATSI
  • 9.
    BancABC Half YearFinancial Results 2012 Economic overview 9 Global economy is set to grow by 3.5% in 2012 compared to 3.9% in 2011 Weak Global recovery depends on progress in Europe and United States Growth momentum has also slowed in various emerging market economies - Brazil, China and India Emerging markets have been hit by investor risk aversion & growth uncertainty
  • 10.
    BancABC Half YearFinancial Results 2012 Economic overview (cont’d) 10 Just like temperature in Europe, the financial crisis is heating up once more Euro area periphery economies at the epicentre of escalation in financial crisis Investors are increasingly unsatisfied with the steps taken to tackle the euro crisis Euro area is expected to enter into a mild recession in 2012 US economic activity less robust
  • 11.
    BancABC Half YearFinancial Results 2012 Economic overview (cont’d) 11 Sub-Saharan Africa (SSA) is not immune to the spillover effects of euro zone crisis SSA economic growth expected to be 5.4% in 2012 Many SSA countries have embarked on policy easing to support economic growth
  • 12.
    BancABC Half YearFinancial Results 2012 Fiscal & debt levels in selected countries 12 0 50 100 150 200 250 -14 -12 -10 -8 -6 -4 -2 0 2 GvtDebt,%ofGDP Fiscal Balance, % of GDP Ireland Greece Portugal Italy Japan UK GermanyFrance USA Brazil India Russia China Spain Negative fiscal Balance means budget deficit
  • 13.
    BancABC Half YearFinancial Results 2012 Inflation development - H112 13 7.9 2.7 18.7 6.4 4.1 6.0 0 2 4 6 8 10 12 14 16 18 20 % Inflation Avg Inflation Botswana Mozambique Tanzania Zambia Zimbabwe SA Though declining, inflation remains very high in Tanzania: Highest TZ inflation rate was 19.8 % in December of 2011 and record low was 3.4 % in February of 2003, Countries have benefited from lower oil prices Food inflation has been broadly stable but expected to pick in H2:2012
  • 14.
    BancABC Half YearFinancial Results 2012 Policy interest rates 14 Moz policy rate was lowered from 15% in Feb-12 to 13.5% in Jun in line with declining inflation In TZ, firming up of overnight rate in H2:2011 was due to tight liquidity conditions In ZM, bank rate averaged 9% in H1:2012 compared to 7.7% H1:2011 Policy interest rates – key monetary policy tools to fight inflation Bots Bank rate remained flat at 9.5% 0 5 10 15 20 25 30 35 % Bots (Bank Rate) Zambia (Bank Rate) Moz (Standing Lending Facility)
  • 15.
    BancABC Half YearFinancial Results 2012 Interest rates landscape – H112 15 Country Avg. TB Yield Rate Avg. Prime Lending Rates Avg. Deposit Rates Avg. Spread Botswana 5.0 11.0 5.9 5.1 Mozambique 7.1 18.9 13.2 5.7 Tanzania 13.2 13.9 9.9 4.0 Zambia 7.0 22.6 7.0 15.6 Zimbabwe --- 10 - 30 0.15 - 18 9.85-12
  • 16.
    BancABC Half YearFinancial Results 2012 Exchange rate movement vs. USD 16 -4 0 4 8 12 16 20 BWP ZAR MZN TZS ZMK 18.4 22.6 -2.7 -1.3 6.5 % YoY: Jun-11 to Jun-12 On annual basis the following currencies depreciated vs. USD: ZAR: 22.6% BWP: 18.4% ZMK : 6.5% TZS :1.3% MZN appreciated vs. USD by 2.7% ZAR volatility linked to Euro zone crisis ZAR weakness pulling down BWP
  • 17.
    BancABC Half YearFinancial Results 2012 ZAR correlation to Euro 17 0.60 0.65 0.70 0.75 0.80 0.85 0.90 6.5 7.0 7.5 8.0 8.5 9.0 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 US$/Euro US$/ZAR US$/ZAR US$/Euro Correlation between Euro & ZAR is ≈ 0.6 Suggesting that ≈ 60% of US$/ZAR movement is explained by US$/Euro movement Has implications for regional trade
  • 18.
    BancABC Half YearFinancial Results 2012 Exchange rate movement per Pula 18 All other ABC currencies appreciated against the BWP ZAR hardest hit emerging market currencies by risk aversion ZMK strength propped up by policies to de- dollarize economy 200 210 220 230 240 250 BWP/TZS 3.00 3.50 4.00 4.50 5.00 5.50 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 BWP/MZN 650 670 690 710 730 750 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 BWP/ZMK
  • 19.
    BancABC Half YearFinancial Results 2012 Deposits per capita (US$) 19 kenya 371 Zambia 283 Tanzania 160 Zimbabwe 276 South Africa 6,637 Botswana 3,103 Mozambique 203 50 60 70 80 90 100 110 0 5 10 15 20 25 30 35 40 45 50 LDR,% #of Banks
  • 20.
    BancABC Half YearFinancial Results 2012 Minimum capital requirements 20 0 20 40 60 80 100 120 140 160 180 200 Angola Malawi SA (Mutual Banks) Tanzania Ethiopia Uganda Kenya Zambia (Local Banks) SA (Commercial Banks) Zambia (Foreign Banks) Zimbabwe Algeria Nigeria 4 5 8 10 10 10 11 20 39 100 100 142 180 US$ m Steep Capital Requirements for Banks in Zambia & Zimbabwe * * * For new applications. Full compliance date for existing banks: Dec 2012 in Zambia and June 2014 in Zimbabwe
  • 21.
    BancABC Half YearFinancial Results 2012 GDP Size (US$ bn) Minimum Cap & No. Banks 21 South Africa 420 Nigeria 273 Algeria 207 Angola 122 Kenya 42 Mozambique 15 Zimbabwe 11 Botswana 18 Tanzania 25 Zambia 21 -20 0 20 40 60 80 100 120 140 160 180 200 220 5 10 15 20 25 30 35 40 45 MinimumCapital,US$m Number of Banks GDP Size (US$ bn) = Bubble Size
  • 22.
    BancABC Half YearFinancial Results 2012 ABC Markets – Banking Sector Landscape (US$m) 22 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Dec-11 Feb-12 Apr-12 Jun-12 Jan-12 Mar-12 May-12 Dec-11 Feb-12 Apr-12 Jun-12 Jan-12 Mar-12 May-12 Dec-11 Feb-12 Apr-12 Jun-12 US$m US$m Total Deposits Credit Pvt Botswana Mozambique Tanzania Zambia Zimbabwe LDR=65% LDR=74% LDR=74% LDR=56% LDR=90%
  • 23.
    BancABC Half YearFinancial Results 2012 Operational Overview FRANCIS DZANYA
  • 24.
    BancABC Half YearFinancial Results 2012 BancABC Botswana Highlights Revenue • NII: +203% • Balance sheet growth • Good margins from consumer lending book • Non Interest Income: +64% • Higher FX trading income Loans and Deposits •Loans: +BWP1.1bn to BWP2.8bn •Impairments: up from BWP2m to BWP15m •Deposits: + BWP0.9bn to BWP3.5bn Outlook • Consumer lending and group scheme loans • 100% home loans, Visa prepaid cards • Chips and PIN cards, ATMs rolled out, VISA acquiring 24 Another Good Run •Ops Stats • Staff: up from 187 (Dec-11) to 211 • Branches: 4 • Customers: up from 9,177 (Dec-11) to 17,919
  • 25.
    BancABC Half YearFinancial Results 2012 BancABC Mozambique Highlights Revenue • NII: +127% • Balance sheet growth • Improved margins amidst tough competition • Non Interest Income: +32% • Increased FX trading income and trade finance fees Loans and Deposits • Loans: +BWP65m to BWP827m • Impairments: up from BWP3m to BWP10m • Gross NPLs increased from 4.3% to 7.4% • Deposits: + BWP79m to BWP1.3bn Outlook • Visa prepaid cards • Campaigns on deposit mobilization • IFC SME Program • Market interest rates on a gradual downward trend 25 Satisfactory •Ops Stats •Staff: up from 125(Dec-11) to 144 •Branches: 6 •Customers: up from 4,516 (Dec- 11) to 5,406
  • 26.
    BancABC Half YearFinancial Results 2012 BancABC Tanzania Highlights Revenue • NII: -38% • Shrinking interest margins • Non Interest Income: - 12% • Lower bond trading volumes Loans and Deposits • Loans: +BWP82m to BWP654m • 13% reduction in Impairment charges • Some NPL accounts still being regularized • Deposits: - BWP86m to BWP975m Outlook • Consumer Lending, acquired Payroll deduction in July • Card based products • Market interest rates slowly trending downwards 26 Below Budget •Ops Stats • Staff: up from 101(Dec-11) to 130 • Branches: +1 during H1:12, total to 5 • Business volumes still a major constraint on Retail and SME
  • 27.
    BancABC Half YearFinancial Results 2012 BancABC Zambia Highlights Revenue • Total income up 78% from BWP45m to BWP80m • Growth in consumer loans • Increased trade finance transactions Loans and Deposits • Loans: +BWP195m to BWP772m • growth mostly on consumer lending book • NPLs: down from 11.6% in Jun-11 to 4.5% in Jun-12 • Deposits:+ BWP65m to BWP613m Outlook • Consumer lending sales campaigns • Rollout of card products 27 Good above budget •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.
    BancABC Half YearFinancial Results 2012 BancABC Zimbabwe Highlights Revenue • NII: 45% higher • Balance sheet growth • Non Interest Income: up 77% from increased customer transactions Loans and Deposits • Loans: +BWP416m to BWP2.4bn • Significant collections from delinquent accounts • NPLs: up from 2.74% in Jun-11 to 5.2% in Jun- 12 • Deposits:+ BWP448m to BWP2.4bn Outlook • Banc Easy, • Group loan schemes, • Mortgage loans and VAF, • SMS banking launched, • Internet/POS acquiring and VISA prepaid card at advanced stage 28 Robust Performance •Ops Stats • Staff: up from 352 (Dec-11) to 462 • Branches: +3 during H1:12 total to 19 • Customers: up from 52,515 to 65,891
  • 29.
    BancABC Half YearFinancial Results 2012 Financial review BEKI MOYO
  • 30.
    BancABC Half YearFinancial Results 2012 Income Statement Performance driven by increase in net interest income and non-interest income – expansion into Consumer Lending Impairments higher due to loan growth and downgrade in Tanzania & Mozambique Operating expenses higher in line with expansion BWP'000 Jun-12 % ∆ Jun-11 Net interest income 273,670 43% 191,354 Impairment of loans (32,408) -26% (25,821) NII after impairment of loans 241,262 46% 165,533 Non-interest income 234,947 61% 145,678 Total income 476,209 53% 311,211 Operating expenses (379,016) -55% (244,026) Net income from operations 97,193 45% 67,185 Share of loss of associates (1,472) 68% (4,546) Profit before tax 95,721 53% 62,639 Tax (40,441) -72% (23,529) Profit for the year 55,280 41% 39,110 Attributable to: -Ordinary shareholders 55,579 49% 37,242 -Minority interests (299) -116% 1,868 Basic EPS (thebe) 37.2 44% 25.9 Dividend per share (thebe) 8.0 18% 6.8 30
  • 31.
    BancABC Half YearFinancial Results 2012 Income Statement Performance driven by increase in net interest income and non-interest income – expansion into retail space Impairments higher due to loan growth and downgrade in Tanzania & Mozambique Operating expenses higher in line with expansion USD'000 Jun-12 % ∆ Jun-11 Net interest income 36,909 27% 29,172 Impairment of loans (4,371) -11% (3,936) NII after impairment of loans 32,538 29% 25,236 Non-interest income 31,686 43% 22,208 Total income 64,224 35% 47,444 Operating expenses (51,116) -37% (37,201) Net income from operations 13,108 28% 10,243 Share of loss of associates (198) 71% (693) Profit before tax 12,910 35% 9,550 Tax (5,454) -52% (3,587) Profit for the year 7,456 25% 5,963 Attributable to: -Ordinary shareholders 7,497 32% 5,678 -Minority interests (41) -114% 285 Basic EPS (US cents) 5.0 28% 3.9 Dividends per share (US cents) 1.0 0% 1.0 31
  • 32.
    BancABC Half YearFinancial Results 2012 Attributable Profit Trend Higher attributable profits driven by increase in core earnings ROE only marginally higher – loss in Tanzania impacted earnings Upward trend in past 3 years supported by sustainable earnings Dip in 2009 due to dollarization & change in business model 32
  • 33.
    BancABC Half YearFinancial Results 2012 Income Statement- Segmental Analysis Significant growth in Botswana and Zambia – consumer loans Zimbabwe continued growing profitability from all business segments Tanzania performance impacted by lower interest margins and higher impairments BWP'000 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 & consolidation adjustments (55,904) (36,027) -55% Total 55,579 37,242 49% 33 Attributable profits
  • 34.
    BancABC Half YearFinancial Results 2012 Income Statement – Segmental Analysis 34 Strong growth in income other than Tanzania and head office entities Total income by entity BWP'000 Jun-12 Jun-11 % ∆ Dec-11 BancABC Botswana 109,330 48,460 126% 116,482 BancABC Mozambique 70,343 43,171 63% 120,660 BancABC Tanzania 33,643 45,376 -26% 55,639 BancABC Zambia 80,329 45,248 78% 100,902 BancABC Zimbabwe 190,361 112,478 69% 218,943 Banking Operations 484,006 294,733 64% 612,626 Head office entities (7,797) 16,478 -147% 46,183 Total 476,209 311,211 53% 658,809
  • 35.
    BancABC Half YearFinancial Results 2012 Income Statement – Segmental Analysis 35 Total income by business and subsidiary BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 53,564 46,003 55,766 2,457 BancABC Mozambique 62,809 39,843 7,534 3,328 BancABC Tanzania 29,980 43,860 3,663 1,516 BancABC Zambia 23,821 8,708* 56,508 36,540* BancABC Zimbabwe 143,129 88,029 47,232 24,449 Banking 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 due to Botswana, Zambia and Zimbabwe. Retail contribution up from 22% in Jun-11 to 36% in Jun-12. 26% growth in Wholesale banking income mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution down from 78% in Jun-11 to 64% in Jun-12. * Restated: BancABC Microfin’s total income moved from wholesale into retail
  • 36.
    BancABC Half YearFinancial Results 2012 Income Statement – Segmental Analysis 36 Total net interest income by business and subsidiary BWP'000 Jun-12 Wholesale Jun-12 Wholesale Jun-11 Retail Jun-11 Retail BancABC Botswana 42,332 28,562 48,129 1,308 BancABC Mozambique 37,882 17,953 8,520 2,514 BancABC Tanzania 10,410 23,513 4,923 1,064 BancABC Zambia 4,666 2,728 29,170 35,336 BancABC Zimbabwe 73,235 57,713 21,822 7,637 Banking Operations 168,525 130,469 112,564 47,859 Head office entities (7,419) 13,026 - - Total 161,107 143,495 112,564 47,859 Growth across all subsidiaries other than Tanzania Retail NII up 135% Wholesale NII up 29%* Retail contribution up to 41% from 25% Lower margins in Tanzania * Excluding Head office entities
  • 37.
    BancABC Half YearFinancial Results 2012 Income Statement – Net Interest Income Overall Group margins at 6.2% (2011: 6.5%) 37 Positive trend in net interest income driven by increased balance sheet size – growth in Consumer Lending
  • 38.
    BancABC Half YearFinancial Results 2012 Income Statement – Impairments & NPLs 38 Gross and net NPL ratios reduced marginally during the period Credit loss ratio declined from 1.2% to 0.8% Increased NPLs in Mozambique, Tanzania and Zimbabwe Change for impairments in Botswana higher mostly due to increased loan book size
  • 39.
    BancABC Half YearFinancial Results 2012 Income Statement- Cost to Income 39 Cost to income ratio marginally up – retail expansion On target in the short to medium term Still maintained at 50%
  • 40.
    BancABC Half YearFinancial Results 2012 Operating Expense per Entity 40 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 BWP'000 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Increase in costs largely driven by retail banking expansion
  • 41.
    BancABC Half YearFinancial Results 2012 Income Statement- Opex per entity 41 Operating expenses (BWP’000) BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 35,942 26,388 27,583 10,425 BancABC Mozambique 29,375 21,266 21,822 11,678 BancABC Tanzania 30,911 25,157 10,129 5,055 BancABC Zambia 16,859 36,158 38,364 2,889 BancABC Zimbabwe 79,690 44,520 44,370 17,293 Banking Operations 192,777 153,489 142,267 47,340 Head office entities 36,904 39,402 7,068 3,794 Total 229,681 192,891 149,335 51,134 Wholesale 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.
    BancABC Half YearFinancial Results 2012 Balance Sheet Overview Balance sheet grew by 18% from BWP9.2 billion in December 2011 & by 47% from BWP 7.3 billion in June 2011 to BWP10.8 billion Deposits grew by 19% from BWP7.4 billion in December 2011 & by 46% from BWP 6.0 billion in June 2011 to BWP8.8 billion Loans and advances increased 29% from BWP6.1 billion in December 2011 & by 95% from BWP 4.0 billion in June 2011 to BWP7.8 billion - growth mostly from Botswana Total Equity grew by 9% from BWP613 million in December 2011 & by 42% from BWP 469 million in June 2011 to BWP 666 million 42
  • 43.
    BancABC Half YearFinancial Results 2012 Balance Sheet 43 BWP '000s Jun -12 Jun-11 % change Dec-11 Cash and short term funds 988,788 1,356,617 -27% 1,243,431 Financial assets held for trading 544,474 1,030,839 -47% 651,049 Financial assets designated at fair value 90,053 84,135 7% 185,412 Loans and advances 7,817,545 4,018,987 95% 6,077,399 Property and equipment 576,491 392,799 47% 514,880 Other Investments 352,005 154,046 129% 138,070 Prepayments and others assets 453,191 327,815 38% 373,647 TOTAL ASSETS 10,822,547 7,365,238 47% 9,183,888 Deposits 8,781,462 6,004,301 46% 7,374,700 Borrowed funds 1,130,944 682,839 66% 981,788 Other liabilities 244,283 208,610 17% 214,833 Total liabilities 10,156,689 6,895,750 47% 8,571,321 Equity attributable to ordinary shareholders 649,903 453,116 43% 596,811 Minority interest 15,955 16,372 -3% 15,756 Total equity 665,858 469,488 42% 612,567 TOTAL EQUITY AND LIABILITIES 10,822,547 7,365,238 47% 9,183,888
  • 44.
    BancABC Half YearFinancial Results 2012 Balance Sheet- USD 44 BWP '000s Jun -12 Jun-11 % change Dec-11 Cash and short term funds 129,185 207,562 -38% 166,122 Financial assets held for trading 71,136 157,707 -55% 86,980 Financial assets designated at fair value 11,765 12,884 -9% 24,771 Loans and advances 1,021,362 614,905 66% 811,940 Property and equipment 75,319 60,098 25% 68,788 Other Investments 45,990 23,569 95% 18,447 Prepayments and others assets 59,209 50,156 18% 49,920 TOTAL ASSETS 1,413,966 1,126,881 25% 1,226,968 Deposits 1,147,298 918,658 25% 985,260 Borrowed funds 147,758 104,474 41% 131,167 Other liabilities 31,915 31,917 0% 28,702 Total liabilities 1,326,971 1,055,049 26% 1,145,129 Equity attributable to ordinary shareholders 84,910 69,327 22% 79,734 Minority interest 2,085 2,505 -17% 2,105 Total equity 86,995 71,832 21% 81,839 TOTAL EQUITY AND LIABILITIES 1,413,966 1,126,881 25% 1,226,968
  • 45.
    BancABC Half YearFinancial Results 2012 Balance Sheet- Loans and Deposits 29% growth in loans since Dec – 11 95% YoY 19% increase in deposits since Dec-11 46% YoY 45 48% CAGR since Jun-08 40% CAGR since Jun-08
  • 46.
    BancABC Half YearFinancial Results 2012 Balance Sheet – Segmental Analysis 46 BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 1,539,202 825,315 1,228,008 14,490 BancABC Mozambique 715,634 500,338 111,174 40,478 BancABC Tanzania 587,178 418,976 67,103 22,277 BancABC Zambia 253,600 84,602 518,030 201,392 BancABC Zimbabwe 1,862,894 1,354,846 586,488 145,817 Banking Operations 4,958,508 3,184,077 2,510,803 424,454 Head office entities 348,234 410,456 - - Total Loans and Advances 5,306,742 3,594,533 2,510,803 424,454 Loans and advances by business and subsidiary 492% growth in Retail Loans mainly due to Botswana, Zambia and Zimbabwe. Retail contribution to total Loans and advances up from 11% in Jun-11 to 32% in Jun-12. 48% growth in Wholesale Loans mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution to total Loans and advances down from 89% in Jun-11 to 68% in Jun-12.
  • 47.
    BancABC Half YearFinancial Results 2012 Balance Sheet – Segmental Analysis 46% growth in deposits largely driven by Botswana and Zimbabwe 47 BWP'000 Jun-12 Wholesale Jun-11 Wholesale Jun-12 Retail Jun-11 Retail BancABC Botswana 3,236,303 1,929,167 227,454 55,079 BancABC Mozambique 1,028,260 822,667 267,209 159,648 BancABC Tanzania 927,226 972,753 47,838 14,796 BancABC Zambia 585,322 375,629 27,493 18,229 BancABC Zimbabwe 2,218,362 990,578 215,995 665,755 Total Deposits 7,995,473 5,090,794 785,989 913,507 14% decrease in Retail deposits mainly due to withdrawal of a large short term deposit in Zimbabwe. Retail contribution to total deposits down from 15% in Jun-11 to 9% in Jun-12. 57% growth in Wholesale deposits mainly due to Botswana, Mozambique and Zimbabwe. Wholesale contribution to total deposits up from 85% in Jun-11 to 91% in Jun-12.
  • 48.
    BancABC Half YearFinancial Results 2012 Balance Sheet – Capital Adequacy Total Capital (BWP m) Capital Adequacy Ratio Subsidiary Jun-12 Jun-11 Min Jun-12 Jun-11 BancABC 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% 48 US $50 million rights offer successfully completed in July 2012 However, current business growth entails raising additional capital Plan is to raise between US $75 - $100 million in tier II capital Zim has new capital reqs and min CAR = 12% effective 1 Aug 2012
  • 49.
    BancABC Half YearFinancial Results 2012 BancABC Tanzania Challenges 49 Tanzania Population: 43m GDP size: US$25 bn Banking Assets: US$9.8bn BancABC Tanzania recorded a loss of BWP5 million in current period due to reduction in interest margins and high impairment charges Entity also had a loss in 2011 of BWP3.3 million – MTM losses, high impairments Entity was profitable in the preceding four years prior to 2011 Historically Tanzania had low capital levels, low single obligor limits High NPLs exacerbated by a slow legal process
  • 50.
    BancABC Half YearFinancial Results 2012 Tanzania market analysis 50 Tanzania remains an attractive market • Second largest economy in East Africa • Between 6%-7% Annual Real GDP growth rate since 2003 • Steady growth in banking assets and liabilities yoy • Larger players dominate the market BancABC has grown steadily: • BancABC’s CAGR consistently grew faster than the market between 2002 and 2011 • Capital increased from $1m in 2002 to $20m in 2012 • Quick resolution of remaining NPLs • Business expansion – wholesale and retail (SMEs, group schemes and consumer lending segment) CAGR Total Market CAGR BancABC TZ Deposits 17.6% 26.8% Loans 26.4% 36.2% Assets 19.2% 29.5% From 2002 To 2011 Top 3 Banks in Tanzania BancABC TZ 2010 2011 2010 2011 Assets 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.
    BancABC Half YearFinancial Results 2012 Head office entities 51 Head office now funded predominantly by dividends Subsidiary dividends and intra-group interest eliminated on consolidation Management fees (full cost re-charge) discontinued after 2008 Income in 2012 lower due to reduction in liquidity and increased liabilities to capitalize subsidiaries ahead of completion o right s issue Improved subsidiaries performance to lead to better funding for H/O Balance sheet restructuring to lead to increased liquidity and income Tax losses in ABCH company to be utilized as far as possible
  • 52.
    BancABC Half YearFinancial Results 2012 Strategy and Outlook DOUGLAS MUNATSI
  • 53.
    BancABC Half YearFinancial Results 2012 Key successes Completed rights offer of US$50 million Recapitalised all banking operations as planned Expanded retail outlets across footprint and introduced retail products/functionality Grown retail to profitability in Botswana, Zambia and Zimbabwe Expanded wholesale business in all operations 53
  • 54.
    BancABC Half YearFinancial Results 2012 Challenges and resolution processes Capital to support current growth trajectory Liquidity to fund business expansion High impairments High costs 54 Raising additional capital Arranging lines of credit at centre and subsidiary level In process of resolving all key NPL accounts To stabilize costs and hence reduce cost to income ratio
  • 55.
    BancABC Half YearFinancial Results 2012 Short to medium term objectives Raise between US $75 - $100 million in tier II capital Additional capital for Botswana and Zimbabwe Expand retail in Tanzania and Mozambique Continue increasing retail outlets Improve liquidity for the Group through additional lines of credit and other forms of funding 55
  • 56.
    BancABC Half YearFinancial Results 2012 Dividend declaration 56 As per Group Policy, a dividend of 8 thebe (about 1 US cent) per share to be paid on 21 Sep 2012 to shareholders on register on 7 Sep 2012
  • 57.
    BancABC Half YearFinancial Results 2012 THANK YOU 57