Analyst Meeting September 2017 Highlights 20 November 2017 - - PowerPoint PPT Presentation

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Analyst Meeting September 2017 Highlights 20 November 2017 - - PowerPoint PPT Presentation

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SBM Group Analyst Meeting September 2017 Highlights 20 November 2017 DISCLAIMER This document has been prepared by SBM Group (SBM Holdings Ltd and its subsidiaries) (the Group) for general circulation and is meant solely for information

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20 November 2017

SBM Group

Analyst Meeting

September 2017 Highlights

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This document has been prepared by SBM Group (SBM Holdings Ltd and its subsidiaries) (the Group) for general circulation and is meant solely for information purpose, without taking into consideration any objective or aim of whoever is receiving this document. SBM Group does not, in any way whatsoever, warrant expressly or impliedly the accuracy and completeness of the contents of this publication and shall not be liable for any loss or damage (including, without limitation, damages for loss of business or loss of profits) or prejudice of any nature whatsoever, arising in contract, tort or otherwise suffered by any person / entity relying on the information contained in this document or arising from any shortcoming, mistake, omission, defect or inaccuracy, in the document arising through inadvertence or any other reason. This document is owned by SBM Group and no part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system without the permission of the organization.

DISCLAIMER

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AGENDA

  • Strategy
  • Financial Highlights
  • Share Price Info
  • 2017 Forecast
  • Q & A

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OUR STRATEGY 2016 - 2020

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Additional dedicated SME desks in Central Flacq, Triolet, Goodlands, Vacoas and Rose Belle Market share: Business Banking (excl GBL) increased by 3.0 pp year-on-year to reach 20.7% in Sep 17 Best Retail Banking Mauritius 2017

KEY ACHIEVEMENTS: CONSOLIDATION

SBM Now [Debit Card, Internet Banking, Top Up & SBM BillPay] Market share: Personal Banking increased by 0.6 pp year-on-year to reach 30.6% in Sep 17 SME: Partnership with FSA - guarantee for bank loans & resources SBM: Best UPI Issuing Bank Mauritius 2016

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Arranger MUR 1.5 Bn Secured Notes Programme - SIT Investment Banking licence July 2017 Raised USD 165 Mn through depositary receipts for Afreximbank Launch of structured products – leveraged notes, capital protected notes, Ghana Coco Bond SBM Mauritius Infrastructure Development Company Africa Infrastructure and Industrialisation Fund, LP

KEY ACHIEVEMENTS: DIVERSIFICATION

AUM increased by 26.4% year-on-year to reach nearly MUR 9 Bn in Sep 17

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SBM Bank (Kenya) Ltd May 2017 Segment B advances significantly increased from 7.0 Bn in Sep 16 to Rs 26.9 Bn in Sep 17 Greater synergy with overseas

  • perations

Pursuing overseas expansion initiatives

KEY ACHIEVEMENTS: INTERNATIONALISATION

Partnered with pan-African financial institutions – Afreximbank/ FSA/ PTA Bank

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SBM Mobile Banking App Online Loan Application New Website October 2017 eStatement initiative Signature Pad

KEY ACHIEVEMENTS: MODERNISATION

Partnership with AliPay: A first in Mauritius

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Building and strengthening staffs and skills Recruitment in key positions & appointment of Group CEO Robust Risk Management framework & policies Streamlined processes Review of organisation structure & governance structure Review of HR Policies

KEY ACHIEVEMENTS: CAPACITY BUILDING

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AGENDA

  • Strategy
  • Financial Highlights
  • Share Price Info
  • 2017 Forecast
  • Q & A

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Q3 RESULTS SHOW MARKED IMPROVEMENT IN PAT

417 553

162 124 101 131 17 65

PAT Sep 16 Net Interest Income Non Interest Income Non Interest Expenses Impairment Charges Share of Profit of Associate Tax PAT Sep 17

+14.9% +21.1% +12.5% +52.2%

  • 33.0%

MUR Million

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MUR 193.31 billion 30 Sep 2017 30 Sep 2016 MUR 146.19 billion

TOTAL ASSETS TOTAL DEPOSITS

MUR 148.97 billion 30 Sep 2017 30 Sep 2016 MUR 113.99 billion MUR 25.16 billion 30 Sep 2017 30 Sep 2016 MUR 23.34 billion

SHAREHOLDERS’EQUITY NET LOANS & ADVANCES

MUR 99.23 billion 30 Sep 2017 30 Sep 2016 MUR 68.13 billion MUR 168.15billion 30 Sep 2017 30 Sep 2016 MUR 122.86 billion

TOTAL LIABILITIES

SBM HOLDINGS LTD CONSOLIDATED KEY FINANCIAL HIGHLIGHTS AS AT SEP 2017

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NET INTEREST INCOME

MUR 3,539 M 30 Sep 2017 (30 Sep 2016: MUR 3,300 M)

NON INTEREST INCOME

MUR 1,955 M 30 Sep 2017 (30 Sep 2016 : MUR 1,670 M)

OPERATING INCOME

MUR 5,494 M 30 Sep 2017 (30 Sep 2016 : MUR 4,971 M)

PROFIT AFTER TAX

MUR 1,864 M 30 Sep 2017 (30 Sep 2016 : MUR 1,995 M)

*for period ended 30 September

SBM HOLDINGS LTD CONSOLIDATED KEY FINANCIAL HIGHLIGHTS – NINE MONTHS TO SEP 2017

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200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 Sep-15 Sep-16 Sep-17

1,134 1,995 1,864 MUR Million

*for period ended 30 September

GROUP PROFIT AFTER TAX FOR NINE MONTHS TO SEP 2017 DECREASED…

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1,995 238 285 543 353

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171 1,864 500 1,000 1,500 2,000 2,500 3,000

PAT Sep 16 Net interest income Non interest income Non interest expenses Impairment charges Share of profit

  • f

associate Tax PAT Sep 17

+28.3% +17.1% +77.1% +100%

  • 28.6%

MUR Million

*for period ended 30 September

+7.2%

… MAINLY DUE TO HIGHER NON INTEREST EXPENSES AND IMPAIRMENT CHARGES…

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%

1.16 1.88 1.46 6.97 11.71 10.17

  • 2

4 6 8 10 12 14 Sep-15 Sep-16 Sep-17 Return on Assets Return on Equity

*for period ended 30 September

… THEREBY IMPACTING ROE AND ROA

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MUR Million

*as at 30 September

95.8 66.8 36.5 128.6 114.0 68.1 43.0 146.2 149.0 99.2 39.0 193.3

50 100 150 200 250 Total Deposits Net Loans and Advances Investment securities Total Assets Sep-15 Sep-16 Sep-17

TOTAL ASSETS GREW SUBSTANTIALLY BY 32.2% DRIVEN BY AN INCREASE IN DOMESTIC MARKET SHARE AND SIGNIFICANTLY HIGHER SEGMENT B ASSETS

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3.88 3.89 3.79 3.50 4.00 Sep-15 Sep-16 Sep-17

%

Yield on investment

7.31 6.66 5.64 3.00 5.00 7.00 9.00 Sep-15 Sep-16 Sep-17

Yield on advances

%

YIELD ON ADVANCES DECLINED DUE TO (i) HIGHER MIX OF SEGMENT B ASSETS (ii) EXCESS LIQUIDITY IN DOMESTIC MARKET AND (iii) DROP IN REPO RATE

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37% 47% 16%

Sep 2015

38% 44% 18%

Sep 2016

37% 39% 24%

Sep 2017

DEPOSIT MIX REMAINED WELL BALANCED

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2.13 1.68 1.54 1.00 1.50 2.00 2.50 Sep 15 Sep 16 Sep 17 Cost of funds

%

COST OF FUNDS IMPROVED AMIDST HIGH LIQUIDITY AND HIGHER MIX OF FCY DEPOSITS

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%

*for period ended 30 September

3.67 3.12 2.77 2.50 3.00 3.50 4.00 4.50 Sep-15 Sep-16 Sep-17 Net Interest Margin

OVERALL, NIM NARROWED BY 35 BPS

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*for period ended 30 September

NET INTEREST INCOME RECORDED SUSTAINED GROWTH

Sep-15 Sep-16 Sep-17

3,136 3,300 3,539

MUR Million 5.2% 7.2%

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Net Fees & Commission

730 823 851

+3% Dividend Income

30 7 3

  • 57%

439

Net trading income

(incl. FX income)

397 765

+74% Other income

(e-business, etc.)

239 401 337

  • 16%

30 Sep 15

Total Non-Interest Income

1,396 1,670 1,956

+17%

30 Sep 16 30 Sep 17

*for period ended 30 September

NON-INTEREST INCOME GREW BY 17%

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3,136 3,300 3,539 1,396 1,670 1,955

SEP-15 SEP-16 SEP-17

Net Interest Income Non Interest Income

4,532 4,971 5,494

MUR Million

*for period ended 30 September

OVERALL, GROSS OPERATING INCOME GREW BY 10.5%

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*for period ended 30 September

909 973 1,162 587 628 809 120 319 492 500 1,000 1,500 2,000 2,500 Sep-15 Sep-16 Sep-17

WHILE NON INTEREST EXPENSES INCREASED SIGNIFICANTLY AMIDST CAPACITY BUILDING INITIATIVES AND CONTINUOUS INVESTMENT IN IT…

MUR Million

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%

*for period ended 30 September

35.66 38.63 44.83 30.00 32.00 34.00 36.00 38.00 40.00 42.00 44.00 46.00 48.00 50.00 Sep-15 Sep-16 Sep-17

… RESULTING IN A RISE IN THE COST TO INCOME RATIO

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*for period ended 30 September

SEP15 SEP16 SEP17 Impairment Charge 1,341 457 810 Gross impaired / Gross Advances (%) 4.71% 6.41% 6.04% Net Impaired / Net Advances (%) 2.01% 2.40% 2.57%

4.71% 6.41% 6.04% 2.01% 2.40% 2.57% 1.00% 3.00% 5.00% 7.00% 500 1,000 MUR Million

GROSS IMPAIRMENT RATIO IMPROVED WHILE NET IMPAIRED RATIO WAS CONTAINED AT LOW LEVELS

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20.51 17.93 19.74 5.43 5.35 5.24 30.55 26.61 20.54 5.00 10.00 15.00 20.00 25.00 30.00 35.00

  • 5.00

10.00 15.00 20.00 25.00 30.00 Sep-15 Sep-16 Sep-17 % MUR Billion Tier 1 Capital MUR Bn Tier 2 Capital MUR Bn Capital adequacy ratio

CAPITAL ADEQUACY RATIO REMAINED WELL ABOVE REGULATORY REQUIREMENTS, ALBEIT DECREASING IN LINE WITH STRONG ADVANCES GROWTH

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AGENDA

  • Strategy
  • Financial Highlights
  • Share Price Info
  • 2017 Forecast
  • Q & A

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SHARE PRICE PERFORMANCE

7 6.5 7.3 6.8 6.6 6.5 6.9 6.4 6.5 6.9 7.1 6.4 6.4 6.3 7.1 6.8 7 6.8 6.94 6.5 6.7 6.7 7.24 7.02 7.5 7.98 7.6 7.16 7.14 7.58 7.9 7.6 7.86 7.74 7.94 7.72 7.4 17-Nov-17, 7.6 1700 1800 1900 2000 2100 2200 2300 2400 2500 2600 5.50 6.00 6.50 7.00 7.50 8.00 8.50 SBMH (LHS) SEMDEX (RHS)

SBHM (Jan 2016 - 17 Nov 2017)

Price (MUR)

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Note: Share information prior to 19 October 2016 has been restated to reflect reverse share split of 10:1 effective that date.

Cents

43.91 77.26 72.18 10 20 30 40 50 60 70 80 90 Sep-15 Sep-16 Sep-17

EARNINGS PER SHARE DECLINED, REFLECTING THE PROFIT TREND

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40.00 45.00 40.00 40.00 3.85% 4.41% 5.63% 6.02% 30.00 35.00 40.00 45.00 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% Dec-13 Dec-14 Dec-15 Dec-16 Dividend (Cents) Dividend yield (%)

DIVIDEND YIELD REMAINED STRONG

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AGENDA

  • Strategy
  • Financial Highlights
  • Share Price Info
  • 2017 Forecast
  • Q & A

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2017 FORECAST

Indicator Achievements 2016 2017 Forecast Return on Average Assets 1.6% At least 1.65% Return on Average Equity 10.0% At least 11% Operating income growth (excl. dividend income) 5.1% 18% to 20% Cost to income ratio 42.5% Less than 44% Gross advances growth 4.8% At least 45% Deposits growth 4.8% At least 30% Net impairment to net advances 2.6% Less than 2.2% Assets under management growth 32.1% At least 25% Group total assets growth 7.9% At least 30% Group PAT growth 43.6% Min of 20%

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AGENDA

  • Strategy
  • Financial Highlights
  • Share Price Info
  • 2017 Forecast
  • Q & A

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QUESTIONS & ANSWERS

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THANK YOU

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