4. BancABC Full Year Financial Results 2011
Up by 22%3 points
down
Financial Highlights
Net asset value per share up from BWP2.88 to BWP3.99
Profits dragged down by high impairment charge which increased from BWP15.8m
in 2010 to BWP79.5m in 2011 & impact of IFC convertible loan of BWP35m
PAT
2011
BWP87.7m
Up by 28%
RoE
2011
16.3%
Cost to
Income
EPS
2011
74%
2011
56.6 thebe
2010
BWP68.6m
2010
16.2%
2010
77%
2010
46.3 thebe
4
Flat
5. BancABC Full Year Financial Results 2011
Financial Highlights
Net asset value per share up from BWP2.88 to BWP3.99
Attributable
Profits (BWPm)
2011
BWP83m
2011
17.5%
2011
3.99
2010
BWP66.7m
2010
10%
2010
2.93
5
Dividend Per
Share (Thebe)
NAV Per (BWP)
Up by 24% Up by 39% Up by 36%
6. BancABC Full Year Financial Results 2011
Financial Highlights
2011
BWP9,2
billion
2010
BWP6,0
billion
Up 53%
2011
BWP6,1
billion
2010
BWP3,1
billion
Up 97%
2011
BWP7,4
billion
2010
BWP4,9
billion
Up 50%
2011
BWP613
million
2010
BWP438
million
Up 40%
Total
Assets
Loans &
Advances
Deposits Equity
6
7. BancABC Full Year Financial Results 2011
Operational highlights
Total retail branches increased from 31 in 2010 to 49 in
2011;
Total retail customer numbers increased by 122% from 46
thousand in 2010 to 108 thousand in 2011;
NPLs down from 8.3% in 2010 to 6.7% in 2011, however
credit loss ratio up from 0.6% in 2010 to 1.7% in 2011;
Drawdown of IFC convertible loan of US$13.5 million in
2011
7
8. BancABC Full Year Financial Results 2011
Economic review
DOUG MUNATSI
9. BancABC Full Year Financial Results 2011
Economic Overview
Derailment of global recovery appears to have been
averted for now
Euro area is expected to enter into a mild recession in
2012
A stronger performance in emerging markets though
growth revised downwards
Europe adopted a tight fiscal stance & measures to
reduce financial stress
US economic activity turning better than initially
expected 9
10. BancABC Full Year Financial Results 2011
Economic Overview
Sub-Saharan Africa (SSA) continuing its post-crisis
recovery
Commodity based countries remain vulnerable to any
global downturn
SSA region grew by 4.9% in 2011 expected to grow by
5.5% in 2012
10
11. BancABC Full Year Financial Results 2011
GDP Ranking as of 2012 – Top 15 Economies
11
0 4,000 8,000 12,000 16,000
Mexico
Korea
Australia
Spain
Canada
India
Russia
Italy
UK
Brazil
France
Germany
Japan
China
US
US$ bn
New Global Order
China overtook Japan
in 2010
China a leading
consumer of commodities
Brazil to overtake UK
in 2012
12. BancABC Full Year Financial Results 2011
GDP Ranking as of 2012 Top 15 African
Economies
0 50 100 150 200 250 300 350 400 450
Botswana
Zambia
Tanzania
Cameroon
Kenya
Ghana
Tunisia
Sudan
Libya
Angola
Morocco
Algeria
Egypt
Nigeria
South Africa
US$ bn
South Africa –
biggest economy in
Africa accounts for
over a ⅓ of SSA GDP
12
13. BancABC Full Year Financial Results 2011
GDP Growth (%) & Size (US$ bn)
South Africa
443
Nigeria
263
Namibia
13
Angola
109
Kenya
41
Mozambique
15
Zimbabwe
12
Botswana
18
Tanzania
25
Zambia
21
0
2
4
6
8
10
12
40 50 60 70 80 90 100 110 120 130 140 150
GDPGrowth2012(%)
2010-11 Global Competitive Rankings out of 139 Countries
5.5% SSA
GDP Growth
GDP Size (US$ bn) = Bubble Size
13
14. BancABC Full Year Financial Results 2011
2011 Inflation Development
Inflation peaked in a number of countries during 2011
Price pressures from volatile and high fuel & food prices
8.5
10.5
12.7
8.7
3.5
5.0
0
2
4
6
8
10
12
14
16
18
20
%
Inflation
Avg Inflation
Botswana Mozambique Tanzania Zambia Zimbabwe SA
14
15. BancABC Full Year Financial Results 2011
Policy Interest Rates
0
2
4
6
8
10
12
14
16
18
%
Tanz (Overnight Rate)
Bots (Bank Rate)
Zambia (Bank
Rate)
Moz (Standing Lending
Facility)
Bots Bank rate remained flat at
9.5%
Moz policy rate was lowered by
150bs in line with declining inflation
In TZ, firming up of overnight rate
in H2 was due to tight liquidity
conditions
In ZM, bank rate averaged 8.8% in
2011 compared to 6.5% in 2010
Policy interest rates – key monetary
policy tools to fight inflation
15
16. BancABC Full Year Financial Results 2011
Exchange Rate Movement vs. USD
Concerns on the pace of
global recovery triggered
ZAR weakness in H2 of 2011
Having appreciated in
2010, ZAR & BWP
depreciated vs. US$ by 24%
& 17%, respectively
MZN appreciated vs. USD by
18%. MZN was being used
as a tool to fight inflation
-20 -16 -12 -8 -4 0 4 8 12 16 20
BWP
ZAR
MZN
TZS
ZMK
16.9
23.6
-17.5
7.7
6.7
-3.5
-10.6
19.6
10.8
3.4
%
YoY: Dec-09 to Dec-10
YoY: Dec-10 to Dec-11
Depreciation (+)Appreciation (-)
16
17. BancABC Full Year Financial Results 2011
Exchange Rate Movement per Pula
660
670
680
690
700
710
720
730
740
750
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
100
200
300
400
500
600
700
800
BWP/TZS
(RHS)
BWP/ZMK
(LHS)
0
1
2
3
4
5
6
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
0
1
2
3
4
5
6
BWP/MZN
BWP/ZAR
Due to dominant weight of ZAR
in the Pula basket of
currencies, the BWP mirrors the
ZAR movement
The following currencies appreciated vs BWP:
MZN (29.4%)
ZMK (8.7%)
TZS (7.9%)
17
20. BancABC Full Year Financial Results 2011
Income Statement
Performance driven by
increase in net interest
income and non-interest
income
Impairment high due to
loan growth and
downgrade in Tanzania &
Zimbabwe
Operating expenses higher
in line with expansion
BWP'000 2011 2010
Net interest income 412,362 38% 297,845
Impairment of loans (79,537) -403% (15,826)
NII after impairment of loans 332,825 18% 282,019
Non-interest income 325,984 23% 264,288
Total income 658,809 21% 546,307
Operating expenses (545,948) -25% (435,093)
Net income from operations 112,861 1% 111,214
Share of loss of associates (5,177) 74% (20,134)
Profit before tax 107,684 18% 91,080
Tax (19,986) 11% (22,495)
Profit for the year 87,698 28% 68,585
Attributable to:
-Ordinary shareholders 83,002 24% 66,710
-Minority interests 4,696 150% 1,875
Basic EPS (thebe) 56.6 22% 46.3
Dividend per share (thebe) 17.5 75% 10.0
20
21. BancABC Full Year Financial Results 2011
Income Statement
Performance driven by
increase in net interest
income and non-interest
income
Impairment high due to
loan growth and downgrade
in Tanzania & Zimbabwe
Operating expenses higher
in line with expansion
USD'000 2011 %change 2010
Net interest income 60,329 38% 43,783
Impairment of loans (11,637) -399% (2,331)
NII after impairment of loans 48,692 17% 41,542
Non-interest income 47,692 23% 38,930
Total income 96,394 20% 80,472
Operating expenses (79,873) -25% (64,089)
Net income from operations 16,511 1% 16,383
Share of loss of associates (757) 74% (2,966)
Profit before tax 15,754 17% 13,417
Tax (2,924) 12% (3,314)
Profit for the year 12,830 27% 10,103
Attributable to:
-Ordinary shareholders 12,143 24% 9,827
-Minority interests 687 149% 276
Basic EPS (US cents) 8.3 22% 6.8
Dividends per share (US cents) 2.4 60% 1.5
21
22. BancABC Full Year Financial Results 2011
Attributable Profit Trend
124
86
58
67
83
42%
23%
14%
16% 16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
20
40
60
80
100
120
140
2007 2008 2009 2010 2011
Attributable profits RoE
Higher attributable profits
driven by increase in core
earnings
ROE flat due to lower
earnings in Tanzania
Upward trend in past 3
years supported by
sustainable earnings
BWP’million
Dip in 2009 due to
dollarization & change in
business model
22
23. BancABC Full Year Financial Results 2011
Income Statement- Segmental Analysis
Zimbabwe
continued to
perform well in all
segments
Zambia
performance
buoyed by
Microfinance
Tanzania affected by
downgrade of
security on NPL
Botswana and
Mozambique post
solid results on
back of improved
NII
Attributable profits
BWP'000 2011 % Cont 2010 % Cont % change
Botswana 28,005 20% 20,040 21% 40%
Mozambique 28,863 20% 22,919 24% 26%
Tanzania (3,326) -2% 15,804 16% -121%
Zambia 31,872 23% 11,203 12% 184%
Zimbabwe 55,090 39% 26,739 27% 106%
Banking Operations 140,504 100% 96,705 100% 45%
Head office & consolidation
adjustments (57,502) (29,995) -92%
Total 83,002 66,710 24%
23
24. BancABC Financial Results 31 December 2011
Income Statement – Segmental Analysis
Doubled retail income during the year
Total Income ( excl impairments)
BWP'000 2011 % change 2010
BancABC Botswana 125,341 48% 84,806
BancABC Mozambique 126,069 46% 86,383
BancABC Tanzania 88,588 3% 85,918
BancABC Zambia 102,737 17% 88,104
BancABC Zimbabwe 264,814 86% 142,630
Banking Operations 707,548 45% 487,842
Head Office & Consolidation adjustments 30,799 -59% 74,292
Total Income 738,347 31% 562,133
Total income (exl. impairments) 2011 2010
BWP'000 Wholesale Retail Wholesale Retail
BancABC Botswana 114,301 11,040 83,273 1,533
BancABC Mozambique 114,796 11,273 82,690 3,693
BancABC Tanzania 83,517 5,071 85,322 596
BancABC Zambia 33,581 69,156 34,752 53,352
BancABC Zimbabwe 186,794 63,480 121,467 21,163
Banking Operations 532,989 160,020 407,504 80,337
Head Office & Consolidation
adjustments 45,337 - 74,292 -
Total Income 578,326 160,020 481,796 80,337
24
25. BancABC Full Year Financial Results 2011
Income Statement- Segmental Analysis
Strong growth in NII in Zimbabwe and Mozambique
Net interest income
BWP'000 2011 % change 2010
BancABC Botswana 79,882 55% 51,452
BancABC Mozambique 60,703 109% 29,057
BancABC Tanzania 50,673 5% 48,038
BancABC Zambia 68,905 2% 67,331
BancABC Zimbabwe 121,575 112% 57,437
Total Banking Operations 381,738 51% 253,314
Head office 30,624 -31% 44,531
Total 412,362 38% 297,845
25
26. BancABC Full Year Financial Results 2011
Income Statement – Segmental Analysis
Botswana:18
%
Mozambique:
14%
Tanzania:12
%Zambia:16%
Zimbabwe:31
%
ABCH &
Other:10%
NII by entity - 2011
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2010 2011
BWP'000
Net interest income by entity
Botswana Mozambique Tanzania Zambia Zimbabwe ABCH & other
Growth in NII across all
entities, Zimbabwe
contribution high boosted
by Retail
27. BancABC Financial Results 31 December 2011
Income Statement – Net Interest Income
Positive trend in net interest income driven
by better liquidity and increased balance
sheet size
Slight reduction in net interest
margins due to reduction in interest
rates on consumer lending in Zambia
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
-
100,000
200,000
300,000
400,000
500,000
2007 2008 2009 2010 2011
BWP'000
Net interest margin
Net int BWP'000 NIM before impairments
NIM after impairments
27
28. BancABC Full Year Financial Results 2011
Income Statement- Net Interest
Income (USD)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2007 2008 2009 2010 2011
USD'000
Net interest margin
Net int USD'000 NIM before impairments
NIM after impairments
28
29. BancABC Full Year Financial Results 2011
Income Statement- Non-interest income
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2007 2008 2009 2010 2011
BWP'000
Non-interest income
Fees and commissions Trading income Gains on investment activities MTM - investment property Other income
BWP'000 2011 % Change 2010
BancABC Botswana 45,459 36% 33,355
BancABC Mozambique 65,366 14% 57,326
BancABC Tanzania 37,915 0% 37,880
BancABC Zambia 33,831 63% 20,773
BancABC Zimbabwe 128,696 51% 85,194
Banking operations 311,267 33% 234,528
Head office 14,717 -51% 29,760
Total 325 984 23% 264,288
The reduction is
due to the
impact of IFC
convertible loan
BWP35 m
29
30. BancABC Full Year Financial Results 2011
Income Statement- Non-interest income
The IFC Convertible loan agreement was signed in 2008 and
drawdown happened in May 2011
The loan is a hybrid instrument (debt-derivative) and therefore
the loan was marked to market through the income statement.
The loss arose from the differential between the conversion
price and the current share price of ABCH together with impact
of exchange differentials.
The net after tax fair value loss of BWP29m was recognized in
the income statement in accordance with IAS 39.
30
31. BancABC Full Year Financial Results 2011
Operating Expense per Entity
BWP'000 2011 % change 2010
BancABC Botswana 84,024 42% 59,370
BancABC Mozambique 80,798 43% 56,597
BancABC Tanzania 61,762 30% 47,670
Zambia 80,674 0% 80,360
Zimbabwe 148,510 39% 106,593
Banking operations 455,768 30% 350,590
Head office 90,180 7% 84,503
Total 545,948 25% 435,093
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Botswana Mozambique Tanzania Zambia Zimbabwe Head office
2010 2011
Increase in opex due
to expansion in Retail
& SME Banking
BWP’000
31
32. BancABC Full Year Financial Results 2011
Income Statement- Cost to Income
47%
59%
82%
77%
74%
2007 2008 2009 2010 2011
Cost to Income Ratio
Cost to income ratio peaked in 2009 due to change in business
model and dollarization in Zimbabwe.
32
34. BancABC Full Year Financial Results 2011
Balance Sheet Overview
Balance sheet grew by 53% from BWP6,0 billion to
BWP9,2 billion
Deposits grew by 50% from BWP4,9 billion to BWP7,4
billion
Loans and advances almost doubled from BWP3,1 billion
to BWP6,1 billion supported by growth in Zimbabwe
Total Equity grew by 40% from BWP438 million to
BWP612 million
34
35. BancABC Full Year Financial Results 2011
Balance Sheet
86%
14%
Total Assets-2011 (BWP‘ million
Wholesale Retail
94%
6%
Total Assets -2010(BWP‘ million
Wholesale Retail
BWP'000 2011 % chg 2010
Cash and cash equivalents 1,243,431 24% 999,338
Financial assets 972,511 -27% 1,326,846
Loans and advances 6,077,399 97% 3,078,110
Property and equipment 647,263 65% 391,498
Other assets 243,284 13% 215,647
Total assets 9,183,888 53% 6,011,439
Deposits 7,374,700 50% 4,907,045
Borrowed funds 981,788 69% 579,420
Other liabilities 214,833 147% 87,116
Total liabilities 8,571,321 54% 5,573,581
Equity -ordinary shareholders 596,811 41% 422,336
Minority interest 15,756 2% 15,522
Total equity 612,567 40% 437,858
Total liabilities & equity 9,183,888 53% 6,011,439
35
36. BancABC Full Year Financial Results 2011
Balance Sheet- USD
Wholesale
86%
Retail
14%
Total Assets-2011 (%)
Wholesale
94%
Retail
6%
Total Assets-2010 (%)
USD'000 2011 % change 2010
Cash and cash equivalents 166,122 7% 154,997
Financial assets 129,927 -37% 205,794
Loans and advances 811,940 70% 477,415
Property and equipment 86,475 42% 60,721
Other assets 32,504 -3% 33,447
Total assets 1,226,968 32% 932,374
Deposits 985,260 29% 761,083
Borrowed funds 131,167 46% 89,868
Other liabilities 28,702 112% 13,512
Total liabilities 1,145,129 32% 864,463
Equity -ordinary shareholders 79,734 22% 65,504
Minority interest 2,105 -13% 2,407
Total equity 81,839 21% 67,911
Total liabilities & equity 1,226,968 32% 932,374
36
37. BancABC Full Year Financial Results 2011
Balance Sheet- Loans and Deposits
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2007 2008 2009 2010 2011
Loans
Deposits
97%
increase in
loans
50%
increase in
deposits
37
49% CAGR 39% CAGR
38. BancABC Full Year Financial Results 2011
Deposits Per Entity
BWP'000 2011 % change 2010
BancABC Botswana 2,563,126 30% 1,966,307
BancABC Mozambique 1,216,349 45% 836,104
BancABC Tanzania 1,060,686 33% 795,640
BancABC Zambia 548,120 117% 252,962
BancABC Zimbabwe 1,986,419 88% 1,056,032
Total deposits 7,374,700 50% 4,907,045
Botswana
34%
Mozambique
17%
Tanzania
15%
Zambia
7%
Zimbabwe
28%
Strong growth in
deposits across all
entities
38
41. BancABC Financial Results 31 December 2011
Balance Sheet – Segmental Analysis
Retail contributed 8.3% of total deposits (Dec 2010: 3.4%)
Deposits Wholesale Retail
BWP'000 Dec 2011 Dec 2010 Dec 2011 Dec 2010
BancABC Botswana 2,418,092 1,948,540 145,034 17,767
BancABC Mozambique 991,922 744,952 224,427 91,152
BancABC Tanzania 1,037,774 788,936 22,912 6,704
BancABC Zambia 522,046 240,775 26,074 12,187
BancABC Zimbabwe 1,794,548 1,018,620 191,871 37,412
Total Deposits 6,764,382 4,741,823 610,318 165,222
41
42. BancABC Financial Results 31 December 2011
Balance Sheet – Capital Adequacy
Total Capital (BWP m) Capital Adequacy Ratio
Subsidiary 2011 2010 Min 2011 2010
BancABC Botswana 234 171 15% 16% 22%
BancABC Mozambique 225 162 8% 15% 18%
BancABC Tanzania 99 97 12% 12% 14%
BancABC Zambia 126 86 10% 16% 30%
BancABC Zimbabwe 284 191 10% 11% 14%
There is now need to raise additional capital
42
43. BancABC Full Year Financial Results 2011
Operational Overview
FRANCIS DZANYA
45. BancABC Full Year Financial Results 2011
Botswana Highlights
Revenue
• Net interest income : + 55%
• Good margins
• Increase in the book
• Non-interest income : + 36%
• High FX Trading volumes
Loans & Deposits
• Loans and Advances :more than
doubled to BWP1.6bn
• Increase in consumer lending
• Deposits increased: from BWP2bn
to BWP2.6bn
• market share up from 5% prior
year to 6%
Operational Statistics
• Staff numbers up from 117 to 186
• Branches up from 2 to 4
• Customer numbers up from 1,500
in 2010 to 9,177 in 2011
Developments & New Products
• Consumer Banking Loans
• 100% home loans;
• Chip and PIN cards;
• ATMs rolled out
• VISA acquiring
• Prepaid VISA Cards
45
47. BancABC Full Year Financial Results 2011
Mozambique Highlights
47
Revenue
• Net interest income: +109%
• Higher margins
• Book Size Increase
• Non interest income: +12%
• FX Trading Margins Shrinkage
• Trade finance fees up
Loans & Deposits
• Good growth of Loan book: up to
BWP761m from BWP424m
• Deposits crossed the billion mark: up
to BWP1.2bn from BWP836m
• Market share increased from 4% to
4.5%.
• Highest retail deposit contributor to
Group
Operational Statistics
• Staff numbers up from 103 to 125
• + 1 branch, total to 6;
• Customer numbers up from 2,442 in
2010 to 4,516 at the end of 2011
Developments and New Products
• Prepaid cards pilot with selected
customers;
• Campaigns on deposit mobilization:
“2014 World Cup” campaign
• Launched the IFC SME program
47
49. BancABC Full Year Financial Results 2011
Tanzania Highlights
Revenue
• Total bank revenue affected by high
impairment of loans: impairments up
from BWP18m to BWP33m
• Non interest income flat at BWP38m,
• Mark-to-market losses in Q4-11
Loans
• Loan book up by 28% from BWP446m
to BWP573m, increase recorded on
consumer lending.
• Deposits increased from BWP795m to
BWP1.0 billion
Operational statistics
• Staff numbers up from 80 in 2010 to
103 in 2011.
• One more branch was opened in 2011,
bringing total to 4
Product Developments
• Rolled out ATM cards
• Introduced fixed deposit balance build
49
51. BancABC Full Year Financial Results 2011
Zambia Highlights
Revenue
• Total income up from BWP91m to
BWP102m
• High consumer loans volumes
• Impairments well controlled
during the year
Loans & Deposits
• Loan book up by 148% from
BWP233m to BWP577m,
• Microfinance book increased by
245% from BWP91m to BWP314m
• Deposits up from BWP253m to
BWP548m, mainly from wholesale
Operational statistics
• Staff numbers up from 128 in 2010
to 187 in 2011
• Branch network grew to 23 to
cover all provinces in Zambia
• Number of customers shot up from
48 thousand to 58 thousand
Developments & New products
• Successful Sales campaigns 100%
MORE
• Mobile banking in a box
• Offline ATM salaries payment
51
53. BancABC Full Year Financial Results 2011
Zimbabwe Highlights
53
Revenue
• Total bank revenue up from
BWP140m to BWP219m,
• Impairment was significantly higher
due to increase in loan book
Loans & deposits
• Loan book up by 132% from
BWP895m to BWP2bn
• Retail Loan book up 5 fold to
BWP378 m
• Deposits up by 158% to BWP2bn,
exceeding market growth of 35%.
Operational Statistics
• Staff numbers increased from 193
to 353
• Branches increased from 6 to 16
and No of ATMs rose from 13 to 21
• Increase in retail customers from
8,800 in 2010 to 34,700 in 2011
Developments and new products
• Group loan schemes
• Mortgage loans and VAF
• SMS banking launched
• Internet /POS acquiring and VISA
prepaid card at advanced stage
53
55. BancABC Full Year Financial Results 2011
Strategy and Outlook
DOUGLAS MUNATSI
56. BancABC Full Year Financial Results 2011
Short to medium term objectives
Rights issue of US$50 million underway;
The rights issue to be fully underwritten by ADC;
To recapitalize all banking operations;
Branches to increase to 71 by end of 2012;
Balance sheet is sound and positions group well for growth in 2012
and beyond
56
57. BancABC Full Year Financial Results 2011
Dividend declaration
57
As per Group Policy, a dividend of 10.5 thebe (1.4
US cent) per share to be paid on 4 May 2012 to
shareholders on register on 13 April 2012
Total dividend for the year will be 17.5 thebe
(2010: 10 thebe) which is approximately 2.4 US
cents (2010: 1.5 US cent)
58. BancABC Full Year Financial Results 2011
ABCH Comparative Prices - ZSE vs. BSE
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0 Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Pula
ABCH ZSE
ZSE Discount(-)/ Premium(+) vs. BSE
ABCH BSE
58
