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BancABC Annual Financial Results 2013 Presentation March 25-26 2014
2
AGENDA
Highlights Economic Review
Operational Overview
Financial Review
Strategy
&
Prospects
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
3
Highlights
ABCH Group CEO, Mr. Doug Munatsi
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
4
Financial Highlights
BWP’ million % Change Dec-13 Dec-12
Attributable profits 49% 198 133
Profit after tax 29% 174 135
ROE - 15.3% 15.3%
Cost to income 5% 66% 71%
EPS (thebe) 10% 79.6 72.1
Dividend per share (thebe) 16% 18.5 16
NAV per share (thebe) 16% 5.64 4.88
Attributable profits up with impressive
growth in Botswana, Zambia and Zimbabwe
Resilient performance
amidst liquidity challenges in most
jurisdictions
Cost to income ratio down due to higher
revenues
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
5
Financial highlights
BWP % Change Dec-13 Dec-12
Total assets 18% 15,784 13,408
Loans and advances 15% 10,555 9,144
Deposits 14% 12,209 10,675
Total equity 27% 1,450 1,137
Measured growth in both loans and advances, driven by both retail banking and wholesale banking
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
6
Financial highlights
Strong growth in NAV on the back of retained profits as well as conversion of IFC debt to equity in April 2013
399 422
597
1,137 1,450
2.73 2.93
4.01
4.88
5.64
-
1.00
2.00
3.00
4.00
5.00
6.00
0
200
400
600
800
1000
1200
1400
1600
2009 2010 2011 2012 2013
Net Asset Value (BWP m) and NAV per share (BWP)
Net asset value Net asset value per share
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
7
Economic
Review ABCH Group CEO, Mr. Doug Munatsi
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
8
Economic Growth by Region
3.7
2.8
1.0
6.7
3.3
6.1
3.4
2.3
0.4
6.9
3.4
5.4
-2
0
2
4
6
8
-2
0
2
4
6
81
1
12
13
14
11
12
13
14
11
12
13
14
11
12
13
14
11
12
13
14
11
12
13
14
GDP Growth Avg Growth
World US Euro Developing
Asia MENA SSA
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
9
Global
• Economic recovery continues to gather pace
• Mature Economies on a recovery path
Developed economies
• Euro zone to return to positive growth
• Uptick in US economy
Emerging countries
• Slow down in growth in China
• Negative impact on commodities
• Currency depreciations - impact of US QE
Sub-Saharan Africa
• Economic growth to remain strong
• Increased public infrastructure spending
• Euro bond Issuances
Economic Overview
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
10
Economic Growth in ABC Markets
BancABC Botswana
•Elections in Oct-14
•Middle income with GDP per Capita of US$7,200
•Relocation of diamond sorting to Botswana
BancABC Mozambique
•Elections in Oct-14
•Political disturbances with opposition
•Strong growth prospects & leading FDI recipient
BancABC Tanzania
•Elections in 2015
•Among fastest growing economies in Africa
•Low GDP per Capita US$730
BancABC Zambia
•Strong economic growth
•Trade Surpluses
•Rising GDP per Capita US$1,650
BancABC Zimbabwe
•Politically stable after elections
•Stuttering growth after double digit growth in 2010-12
•Huge liquidity challenges
•FDI to remain low
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
11
GDP Growth in ABC Markets
3,000
4,000
5,000
6,000
7,000
8,000
-8
-6
-4
-2
0
2
4
6
8
10
2009 2010 2011 2012 2013 2014
GDP in Botswana
GDP per Capita GDP Growth
% Growth
US$ Capita
200
300
400
500
600
700
800
6.0
6.5
7.0
7.5
8.0
8.5
9.0
2009 2010 2011 2012 2013 2014
GDP in Mozambique
GDP per Capita GDP Growth
% Growth
US$ Capita
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
12
GDP Growth in ABC Markets (cont’d)
200
300
400
500
600
700
800
5.0
5.5
6.0
6.5
7.0
7.5
8.0
2009 2010 2011 2012 2013 2014
GDP in Tanzania
GDP per Capita GDP Growth
% Growth
US$ Capita
200
600
1,000
1,400
1,800
5.8
6.3
6.8
7.3
7.8
2009 2010 2011 2012 2013 2014
GDP in Zambia
GDP per Capita GDP Growth
% Growth
US$ Capita
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
13
GDP Growth in ABC Markets (cont’d)
200
400
600
800
1,000
1,200
2
4
6
8
10
12
14
2009 2010 2011 2012 2013 2014
GDP in Zimbabwe
GDP per Capita GDP Growth
% Growth
US$ Capita
0
2,000
4,000
6,000
8,000
10,000
-3
-2
-1
1
2
3
4
5
2009 2010 2011 2012 2013 2014
GDP in South Africa
GDP per Capita GDP Growth
% Growth
US$ Capita
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
14
2013 Inflation Rates in ABC Markets (%)
5.9
4.2
7.9
7.0
1.6
5.8
0
2
4
6
8
10
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Feb
-13
Ap
r-1
3
Jun
-13
Au
g-1
3
Oct
-13
Dec
-13
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Feb
-13
Ap
r-1
3
Jun
-13
Au
g-1
3
Oct
-13
Dec
-13
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Feb
-13
Ap
r-1
3
Jun
-13
Au
g-1
3
Oct
-13
Dec
-13
Tanzania Mozambique Botswana Zambia Zimbabwe South Africa
Inflation either stable or declining!
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
15
Policy Interest Rates
Policy Rates
Dec-12 %
Dec-13 %
Change Since
Dec-11
Comment
Botswana Bank Rate
9.5 7.5 (2.00) Lower inflation allowed Bank of Botswana to reduce Bank rate (BR) BR lowered 4-times in 2013
Mozambique Standing Lending Facility
9.5 8.25 (1.25) Loose monetary policy stance. The SLF lowered 3-times during the year
Tanzania 91-dy
11.89 13.61 1.72 Higher interest yields despite declining inflation
Zambia Policy Rate
9.25 9.75 0.50 Monetary policy tightening in response to rising inflation
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
16
Lending & Deposit Interest Rates
Interest Rates
Average lending
rate %
Average deposit
rate %
Spread Comment
Botswana 10.21 4.91 5.30 Monetary policy transmission is working Lending & deposit rates have both come down in line with falling Bank rate
Mozambique 20.09 9.68 10.41 Interest rates have not responded significantly despite the policy rate being aggressively reduced over the years
Tanzania 14.02 11.34 2.68 Narrowed Interest rate spread reflecting improved financial deepening
Zambia 16.3 6.3 10.0 There is pressure to reduce rates which remain stubbornly high
Zimbabwe 20.0 8.0 12.0 High interest spread still exists Liquidity squeeze keeping interest rates high
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
17
Exchange Rate Movement vs. USD
0 4 8 12 16 20 24
BWP
ZAR
MZN
TZS
ZMK
12
23
1.5
-0.1
7.1
%
YoY: Dec-12 to Dec-13
Depreciation vs. USD
The Following currencies depreciated vs USD:
•ZAR; 23%
•BWP; 12%
•ZMW; 7%
ZAR weighed down by:
● Labour unrests
● Widening current account deficit
● US Quantitative Easing
MZN Stable assisted by Central Bank Interventions
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
18
Exchange Rate Movement vs. ZAR
All currencies appreciated vs. ZAR:
•TZS; 18.8%
•MZN; 17.6%
•ZMW; 13.6%
• BWP; 8.8%
Lower imported inflation from SA
• SA more prone to global shocks due to closer links with Euro
-20 -15 -10 -5 0
BWP
MZN
TZS
ZMK
-8.8
-17.6
-18.8
-13.6
%
YoY: Dec-12 to Dec-13
Appreciation vs. ZAR
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
19
Sizes of Banking Systems in ABC Markets
5,7
98
6,0
46
8,3
28
3,8
25
4,7
90
0
2,000
4,000
6,000
8,000
0
2,000
4,000
6,000
8,000
No
v-1
2
Fe
b-1
3
Ma
y-1
3
Au
g-1
3
De
c-1
2
Ma
r-1
3
Ju
n-1
3
Se
p-1
3
Ja
n-1
3
Ap
r-1
3
Ju
l-1
3
Oct-
13
No
v-1
2
Fe
b-1
3
Ma
y-1
3
Au
g-1
3
Ja
n-1
3
Ap
r-1
3
Ju
l-1
3
Oct-
13
US$
m
US$
m
Total Deposits Credit Pvt
Botswana Mozambique Tanzania Zambia
2013 2013 2013 2013 2013
Zimbabwe
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
* Jun-13
0%
2%
4%
6%
8%
10%
12%
Bots Moz Tanz Zam Zim
2013 market share
Deposits Loans Total assets
20
BancABC Market Share
Growing market share in Botswana & Zimbabwe
Need to grow critical mass in other markets
0%
2%
4%
6%
8%
10%
12%
Bots Moz Tanz Zam Zim
2012 market share
Deposits Loans Total assets
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
21
ABCH Group COO, Mr. Francis Dzanya
Operational
Overview
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
22
Group Highlights
Staff
Clients
Channels
Communities
The banking group created 191 jobs in all subsidiaries
Total client numbers up by 48% to 277,383
BWP10.5bn Total loans and BWP12.2bn Total deposits
Total branches up by 12 to 73 Total ATMs at 74
Increased community participation and sponsorships (Dynamos,
Highlanders, Zebras, Green Buffaloes…)
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
23
Botswana Highlights
Income statement
• PAT increased from BWP94m to BWP153m
• NII up 55% to BWP391m
• NIR up by 30% to BWP94m
Statistics
• Staff complement at 284, up from 234
• Increased branches from 5 to 8
• Increased customer numbers from 28,735 to 42,421
Loans & deposits
• Loans increased from BWP3.4bn to BWP3.8bn
• Deposits increased from BWP4.3bn to BWP4.7bn
• Consumer loans make up 61% of total loans
Outlook
• Focus on deposit mobilization and diversification of the depositor book
• Grow non interest income
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
24
Mozambique Highlights
Income statement
• PAT dropped from BWP18m to BWP9m
• High impairment charge from BWP18m last year to BWP51m in 2013
• Fee income grew from BWP26m to BWP48m
Statistics
• Staff complement at 205, up from 166
• Increased branches from 8 to 10
• Increased customer numbers from 6,448 to 11,168
Loans & deposits
• Loans increased from BWP876m to BWP1.4 bn
• Deposits increased from BWP1.4bn to BWP2.3bn
• Some in-roads made in retail loans and deposits
Outlook
• Grow loans and deposits
• Expansion in number of branches
• Tight control of impairments
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
25
Tanzania Highlights
Statistics
• Staff complement at 212, up from 135
• Branches remained at 4, added 4 loan centers
• Increased customer numbers from 6,813 to 21,644
Outlook
• Focus on growing consumer loans
• Grow deposit base
• Control impairments
• Manage expenses
Income statement
• Disappointing set of results, losses at BWP20m
• Operating expenses increased faster than annuity income
• NIR increased from BWP 54m to BWP68m
• Combined impairments of BWP136m and loss of BWP94m
Loans & deposits
• Loans dropped from BWP747m to BWP575m
• Deposits increased from BWP1.2bn to BWP1.3bn
• Loans transferred to TDFL at BWP 282m book value
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
26
Zambia Highlights
Statistics
• Staff complement at 221, up from 211
• Branches increased to 22 from 21
• Increased customer numbers from 62,541 to 88,137
Loans & deposits
• Loans increased from BWP1bn to BWP1.4bn
• Deposits increased from BWP834m to BWP1.2bn
• Loans and deposits were boosted by increased capital which is now BWP825m
Outlook
• Bank met central bank capital regulations in Dec 2013
• Leverage additional capital and grow loans and deposits
• Management of costs key going forward
Income statement
• PAT increased from BWP36m to BWP50m
• Impressive growth in non interest revenue up from BWP110m to BWP158m
• NPLs well managed – recovered BWP7.8m
• Cost to income ratio at 62%
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
27
Zimbabwe Highlights
Statistics
• Staff complement at 514 from 507
• Increased branches from 21 to 25
• Increased customer numbers from 84,156 to 114,847
Loans & deposits
• Loans increased from BWP3.0bn to BWP3.1bn
• Deposits dropped from BWP3.1m to BWP2.7bn but increased from half year position of BWP 2.3bn
Income statement
• PAT increased from BWP103m to BWP118m
• NII up 78% to BWP404m
• Impairment charge doubled to BWP92m compared to 2012
Outlook
• Focus on growing retail and consumer lending
• Grow deposit base and sweat the retail investment
• Effective cost management
• Reduce NPLs
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
28
ABCH Group CFO, Mr. Beki Moyo
Financial Review
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
29
Income statement- BWP BWP‘ million % Change 2013 2012
Net interest income 50 1,010 673
Impairments (137) (328) (138)
NII after impairments 28 682 535
Non interest revenue 25 692 552
Operating expenses (29) (1,116) (869)
Share of associate results 29 (4) (6)
Profit before taxation 20 254 212
Taxation (3) (80) (77)
Profit for the year 29 174 135
Attributable to
-ordinary shareholders 49 198 133
-minority shareholders (1108) (24) 2
Solid performance hampered by significant rise in impairments of loans
Impressive growth in both NII and NIR
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
30
Income Statement- USD
USD‘ million % Change 2013 2012
Net interest income 35 119 88
Impairments (113) (39) (18)
NII after impairments 15 80 70
Non interest revenue 13 82 73
Operating expenses (15) (132) (114)
Share of associate results 36 (0.5) (0.7)
Profit before taxation 7 30 28
Taxation 7 (9) (10)
Profit for the year 16 21 18
Attributable to
-ordinary shareholders 34 24 18
-minority shareholders (1005) (3) 0.3
Solid performance hampered by significant rise in impairments of loans
Impressive growth in both NII and NIR
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
31
Positive trend in NAV
Continued growth in NAV on the back of retained profits as well as new shares issued
399 422
597
1,137 1,450
2.73 2.93
4.01
4.88
5.64
-
1.00
2.00
3.00
4.00
5.00
6.00
0
200
400
600
800
1000
1200
1400
1600
2009 2010 2011 2012 2013
Net Asset Value (BWP m) and NAV per share (BWP)
Net asset value Net asset value per share
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
32
Strong performance
58 67
83
133
198
14%
16% 16%
15% 15%
13%
14%
14%
15%
15%
16%
16%
17%
0
50
100
150
200
250
2009 2010 2011 2012 2013
Profit (BWP m) and ROE (%)
Attributable profit ROE
Impressive growth in attributable profits over the past 5 years
ROE flat due to increase in shareholder funds on the back of retention of profits coupled with share conversion by IFC in 1H-2013.
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
33
Attributable profits per entity
BancABC Bots 49%
BancABC Moz 3%
BancABC Tanz (6%)
BancABC Zam 16%
BancABC Zim 38%
2013 PAT
94
18
(39)
36
103
153
9
(20)
50
118
(50)
-
50
100
150
200
BancABCBotswana
BancABCMozambique
BancABCTanzania
BancABCZambia
BancABCZimbabwe
Dec-12 Dec-13
2012 and 2013 PAT
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
34
Net interest income
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2009 2010 2011 2012 2013
BW
P '000
Net int BWP'000 NIM before impairments NIM after impairments
Phenomenal growth in net interest income – up by 50%
NIM before impairment increased to 7.7% but down to 5.2 % after factoring in impairments
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
35
Net interest income per entity
NII boosted by consumer lending in Botswana and Zimbabwe
Zambia NII affected by capping of interest rates by the Government
Tanzania contribution low due to lower loan book
Botswana 37%
Mozambique 12%
Tanzania 4%
Zambia 8%
Zimbabwe 39%
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
36
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2009 2010 2011 2012 2013
Cre
dit loss
ratio
NPL r
atios
NPL and credit loss ratios
Gross NPL ratio Net NPL ratio Credit loss ratio
Credit loss ratios
Gross NPL increased marginally from 9.2% to 9.8% in 2013
However, net NPLs down to 4.8% from 6.1% in 2012
More aggressive provisioning saw credit loss ratio increase to an all time high of 3.3%
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
37
Impairments and credit loss ratio
Impairments high with increased non-performing loans
Significant provisions made in Tanzania, Zimbabwe and Mozambique
51
16
80
138
328
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
-
50
100
150
200
250
300
350
2009 2010 2011 2012 2013
BW
P 'm
illio
n
Impairments
Impairments Credit loss ratio
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
38
Asset quality and impairments
BWP’ million 2013 2012 2011 2010 2009
Gross loans 11,166 9,460 6,295 3,217 2,130
Non-performing loans 1,118 875 418 268 204
Impairments 611 316 218 138 135
Portfolio impairments 94 78 45 17 13
Specific impairments 517 238 173 121 122
Impairment charge 324 138 80 16 51
NPL as a % of gross loans 9.8% 9.2% 6.6% 8.2% 9.6%
Credit loss ratio 3.3% 1.8% 1.7% 0.6% 2.4%
Implied loss given default 45% 27% 41% 45% 60%
NPL coverage ratio at 55% up from 36% in prior year
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
39
Asset quality per business class
Per segment Gross loans NPL NPL ratio
Corporate lending 5,382 923 17.1%
Consumer & retail lending 4,711 141 3.0%
Instalment finance 670 46 6.9%
Mortgage lending 349 7 2.1%
Commercial & property finance 54 1 1.0%
Total 11,166 1,118 10%
Substantial NPLs in Corporate Lending
Relatively good quality in Instalment Finance, Retail and Consumer Lending as well as Mortgage Lending
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
40
Impairment per entity
Significant impairments recorded in Zimbabwe, Mozambique and Tanzania
The 3 entities accounted for 82% of impairment for the year
5 customers account for 73% of the impairments
42
51
9
7 92
127
BancABC Botswana
BancABC Mozambique
BancABC Tanzania
BancABC Zambia
BancABC Zimbabwe
Head office entities
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
41
What we are doing to address impairments
Improving credit management from granting to collection
Reducing single obligor limits
Improving documentation
Increasing security so that loss given default is lower
More reliance on cash flows and less on security
Regimented approach to credit management
Creation of special operations to manage delinquent accounts
Character, character, character
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
42
Non Interest Revenue
(100,000)
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2009 2010 2011 2012 2013
BW
P '0
00
Fees and commissions Trading income Gains on investment activities MTM - investment property Other income
Good momentum in non interest revenue, with commissions and fees boosted by consumer banking activities
Resilient growth in trading income despite shrinking margins across subsidiaries
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
43
Non interest revenue per entity
BWP‘ million % change 2013 2012
BancABC Botswana 30 94 72
BancABC Mozambique 32 89 67
BancABC Tanzania 27 68 54
BancABC Zambia 44 158 110
BancABC Zimbabwe (7) 197 212
Banking operations 18 606 515
Head office entities 126 86 38
Non interest Revenue 25 692 553
With the exception of BancABC Zimbabwe, all entities recorded impressive growth in NIR
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
44
Operating costs and cost to income ratio
Cost to income ratio trending downwards on the back of increased income
Operating expenses higher due to increased number of staff and branches
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
200
400
600
800
1,000
1,200
2009 2010 2011 2012 2013
BW
P 'm
illio
n
Opex (BWP'million) Cost to Income Ratio (%)
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
45
Operating expenses per category
Staff costs constitute 39% of total operating expenses
-
200
400
600
800
1,000
1,200
2009 2010 2011 2012 2013
BW
P 'm
illio
n
Staff costs Administrative costs IT Depreciation Premises Marketing
29%
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
46
Staff numbers by entity
Major contributor to costs, staff numbers up 15% from 1,310 in 2012 to 1,501 in 2013
234
166 135
211
507
57
284
205 212 221
514
65
0
100
200
300
400
500
600
Botswana Mozambique Tanzania Zambia Zimbabwe ABCH
Human Capital
2012 2013
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
47
Operating Expenses per Entity
BWP‘ million % Change 2013 2012
BancABC Botswana 49 246 166
BancABC Mozambique 27 146 115
BancABC Tanzania 30 128 98
BancABC Zambia 18 148 126
BancABC Zimbabwe 30 350 270
Banking operations 31 1,018 775
Head office entities 3 98 94
Total Operating expenses 28 1,116 869
Increase across all entities due to increased activities as a result of additional branches and higher staff numbers
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
48
Balance Sheet- BWP
% Change Dec-13 Dec-12
Cash & cash equivalents 24 2,304 1,859
Financial assets 24 1,617 1,301
Loans & advances 15 10,555 9,144
Property & equipment 11 887 798
Other assets 38 421 306
Total assets 18 15,784 13,408
Deposits 14 12,209 10,675
Borrowed funds 45 1,759 1,213
Other liabilities 1 368 364
Ordinary shareholders equity 27 1,450 1,137
Minority interest (110) (2) 19
Total liabilities & equity 18 15,784 13,408
Continued to strengthen our balance sheet, growth of 18%
Progress on loans & advances
Deposit mobilization a key focus area
Increased cash and short term funds
Strong capital footing
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
49
Balance sheet- USD
% Change Dec-13 Dec-12
Cash & cash equivalents 10 263 239
Financial assets 10 184 168
Loans & advances 2 1,203 1,177
Property & equipment (2) 101 103
Other assets 22 48 39
Total assets 4 1,799 1,726
Deposits 1 1,392 1,374
Borrowed funds 29 201 156
Other liabilities (17) 41 48
Ordinary shareholders equity 13 165 146
Minority interest (109) (0.2) 2
Total liabilities & equity 4 1,799 1,726
Continued to strengthen our balance sheet, growth of 4%
Progress on loans & advances
Deposit a key focus area
Increased cash and short term funds
Strong capital footing
Depreciation of BWP affected USD numbers
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
50
Balance sheet
Growth recorded on all interest earning asset categories. Overall 18% up
Loans up by 15%, whilst cash and liquid assets grew by 24%
1,859 2,304
1,301 1,617
9,144
10,555
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2012 2013
BW
P 'm
illi
on
Total Earning Assets
Cash & cash equivalents Financial assets Loans & advances
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
51
Balance sheet
18% increase in interest bearing liabilities (deposits, up 14% and 45% increase in borrowed funds)
10,675 12,209
1,213
1,759
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2012 2013
BW
P 'm
illio
n
Liabilities
Deposits Borrowed funds
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
52
Loans per entity
BWP‘ million Dec-13 Dec-12 % change 5 yr CAGR
BancABC Botswana 3,750 3,411 10 57%
BancABC Mozambique 1,471 877 68 40%
BancABC Tanzania 575 747 (23) 4%
BancABC Zambia 1,390 1,034 34 47%
BancABC Zimbabwe 3,074 2,981 3 136%
Banking entities 10,260 9,050 13 53%
Head office entities 295 94 209 28%
Total loans 10,555 9,144 15% 52%
Significant growth registered in Mozambique and Zambia
Tanzania loan book regressed, after transfer of loans to TDFL accounted for in “Head office entities”
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
53
Loans and advances
BWP' million Dec-13 Dec-12 % Change
Corporate lending 5,382 4,612 17
Consumer & retail lending 4,711 3,965 19
Instalment finance 670 561 19
Mortgage lending 349 268 30
Commercial & property finance 54 54 -
Gross loans & advances 11,166 9,460 18
Less: Credit impairments (611) (316) 93
Net loans & advances 10,555 9,144 15
Growth registered in Corporate lending as well as consumer lending
Corporate lending contributed 48% to total loans and advances
Consumer loans contribution at 42%, up from 41% in 2012
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
54
Deposits
BWP'million Dec-13 Dec-12 % change 5 yr CAGR
BancABC Botswana 4,726 4,262 11 35%
BancABC Mozambique 2,321 1,355 71 30%
BancABC Tanzania 1,298 1,148 13 18%
BancABC Zambia 1,155 835 38 53%
BancABC Zimbabwe 2,709 3,075 (12) 81%
Total deposits 12,209 10,675 14 38%
With the exception of BancABC Zimbabwe strong growth registered across the board. Notably in BancABC Mozambique and BancABC Zambia
Zimbabwe decreased by 12%, but picked up after 1H-2013
Impressive growth in retail deposits with BancABC Botswana and BancABC Mozambique leading the way
Wholesale deposits at 88% continue to contribute significantly to total deposits
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
55
Well capitalized banking operations
BancABC Zambia and BancABC Zimbabwe met the stringent capital requirements;
BancABC Tanzania capitalized in July 2013 and CAR at 13.18% which is within regulatory threshold of 12%
686
291 197
825
748
19% 15%
13%
57%
16%
0%
10%
20%
30%
40%
50%
60%
-
100
200
300
400
500
600
700
800
900
BancABC Botswana BancABCMozambique
BancABC Tanzania BancABC Zambia BancABC Zimbabwe
BW
P 'm
illio
n
Capital Adequacy Ratio
Capital CAR
(US$ 33m) (US$ 23m)
(US$ 94m)
(US$ 85m) (US$ 78m)
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
56
Strategy & Prospects
ABCH Group CEO, Mr. Doug Munatsi
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
Complete retail branches roll out and increase alternative channels through partnerships
Raise tier I capital of US$100m Increase minimum capital in each subsidiary to between US$50m and US$100m by 2015
Arrange credit lines of US$200m to US$300m
Target cost to income ratio of under 50%, in all banking operations by 2015
Grow market share to 5% -10% in all banking operations by 2015
57
Short to medium term objectives
Market share
Costs
Funding
Channels
BancABC Annual Financial Results 2013 Presentation March 25-26 2014
58
Dividend Declaration
In accordance with Group Policy, a dividend of 4.5 thebe (0.5 US cent) to be paid on 2 May 2014 to shareholders on the register on 18 April 2014
Total dividend for the year will be 18.5 thebe (2012: 16 thebe) which is approximately 2.1 cents (2012: 2.1 US cents)