Q12019 RESULTS OUR REGIONAL PRESENCE Branches 10 Ethiopia - - PowerPoint PPT Presentation
Q12019 RESULTS OUR REGIONAL PRESENCE Branches 10 Ethiopia South ATMs 2 Sudan Staff 138 (Representative Office) Agents 0 KShs. 119B Branches 15 Uganda ATMs 17 TOTAL EQUITY Staff 322 Branches 200 Agents 227 ATMs 369 Kenya 258
Q12019 RESULTS
TOTAL EQUITY
258 BRANCHES
946 ATMS, 16,642 AGENTS & MERCHANTS
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Branches 200 ATMs 369 Staff 5,058 Agents 8,604 Branches 10 ATMs 2 Staff 138 Agents 0 Staff 322 Agents 227 Branches 5 ATMs 7 Staff 122 Agents 172 Branches 14 ATMs 25 Staff 288 Agents 270 Branches 14 ATMs 17 Staff 292 Agents 49
Kenya South Sudan
Branches 15
Uganda ATMs 17 Burundi Rwanda T anzania Ethiopia
(Representative Office)
Profit Before Tax (KShs. M) 1Q19 8,496 1Q18 7,484 1Q18 159,432 22.6% 1Q18 19.5% 1Q18 418,618 1Q18 43,775 1Q18 49.1% 1Q18 496,366 Non Performing Loans (KShs. M) 1Q19 38,824 Cost to Income Ratio 1Q19 48.5% Customer Deposits (KShs. M) 1Q19 552,204 Return
Equity 1Q19 21.9% Net Loans and Advances (KShs. M) 1Q19 464,263 Total debt / Total equity 1Q19 18.0% 1Q18 1Q19 135,057 Market Capitalization (KShs. M)
Q1 2019 FINANCIAL HIGHLIGHTS
Staff costs (KShs. M) 1Q19 4,612 1Q18 4,452
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Economicdrivers:
remittances, tourism & horticulture
Banking Industry:
Laundering and Combating the Financing of T errorism (AML/CFT)
National Bank of Kenya (NBK) offer
shareholders as per regulatory standards
Overview of the year to date
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MACRO- ECONOMIC HIGHLIGHTS
Kenya
2018 GDP Growth Rate( % )
Contribution to GDP 2018(%) 2018Growth (%) 6.3%
21.30 6.40 9.64 8.36 7.58
AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL& CONSTRUCTION ICT HEALTH MINING& ESTATE STORAGE INSURANCE QUARRYING
6.87 7.12 6.09 1.73 1.03 5.60 4.20 4.10 6.30 5.90 8.80 5.60 6.60 11.40 4.50 2.80
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4.25
GDP Growth (%)
Tanzania Uganda Rwanda Burundi Ethiopia
8.0 2.8 7.2 6.1 6.7 2018P* East Africa GDP Growth Rate ( % )
5.7%
South Sudan
*Source: AfDB, Africa Economic Outlook 2019
MACRO- ECONOMIC HIGHLIGHTS
Regional GDP Growth
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Inflation rate Target Upper Target Lower Non Food Fuel 91- da ybill A vg.lendingrates CBRrate
8.02 10.00 13.65 13.49 13.22 12.78 12.61 8.00 7.97 7.73 7.67 7.64 7.56 7.36 7.19 7.02 7.08
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 1 8 2 1 8 2 1 8 2018 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 9 2019 2019
Interest Rate Evolution(%)
7.50 4.83
2.50
3.00 4.35 3.50
MACRO- ECONOMIC HIGHLIGHTS
Kenya Inflation Evolution(%)
8
9.50
MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 1 8 2 1 8 2 1 8 2018 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 9 2019 2019
7.63 7.34 9.00 12.47
USD/KES Exchange Rate(%)
101.3 100.6 101.0 100.6 100.8 102.6 100.2 100.4 100.7
Exchange Rates to USD
Tanzania Uganda Rwanda Burundi Ethiopia
130 28 1,826 902 3,707 2,344
South Sudan
MACRO- ECONOMIC HIGHLIGHTS
Currency Movement
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MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 1 8 2 1 8 2 1 8 2018 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 9 2019 2019
Current Account Balance (%
2014
2015 2016 2017 2018
MACRO- ECONOMIC HIGHLIGHTS
K enya
3.8% 2.8% 2.0% 4.3% 4.3% 3.9% 4.4% 3.0% 3.4%
12 Month Private Sector CreditGrowth
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MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 1 8 2 1 8 2 1 8 2018 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 8 2 1 9 2019 2019
3.0% 2.4%
Q1 2019
March2018 March2019
12% decrease in average transactions / tellerper day 12% decrease in Number of branch transactions.
OUR CHANNEL CONTRIBUTION
BRANCH TELLER
9%
AGENCY, INTERNET AND POS
27%
MOBILE
56%
ATMS
8%
A
eller perday Number of Branch Transactions( M ) Mar 2018 Mar 2019
80.0 70.3 4.5 4.0
91% of
transactions performed
branch
Mar 2018 Mar 2019
137%
growth in non-branch revenue to
MOBILE
42%
AGENCY, INTERNET AND POS
32%
BRANCH TELLER
14%
ATMS
12% 12
90 55.1
1Q 17 1Q18 1Q19
(M) V alueof Transactions (KShs.B)
75 26.0 9.6 13.4 32.5 32.5 48.1 48.1 17.3 17.3 2.1 2.1
B2C B2B C2B LIPA KARO
MobileTransaction type(%)
OUR CHANNEL CONTRIBUTION
270%
Growth in Mobile Loans Advanced
1Q 2019 1Q 2018
1Q 18
9.2B
1Q 19
33.8B 13
1,692
Mobile Revenue (KShs.M )
646
1Q 17 1Q18 1Q19 1Q18 1Q19
66 25
Agent revenue (KShs M)
(M) V alueof Transactions (KShs.B)
49 10.8 4.6 7.8 64 75 104 14.7 15.0 60.4 37.8 16.4 14.9 8.1 29.2 0.9 0.1 0.7 1.7
CASH DEPOSIT CASH WITHDRAWAL SCHOOL FEES BALANCE ENQUIRY BILL PAYMENT OTHERS
Agency Transaction type(%)
OUR CHANNEL CONTRIBUTION
35%
Growth in Agency Banking Volumes
*Others: Account opening, mini statement, load cards and Funds transfer
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1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19
1Q 2019 1Q 2018
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(M) V alue of Transactions (KShs.B)
OUR CHANNEL CONTRIBUTION
86 130 3.7 3.4 3.7
2%
Growth in ATM Volumes
15 ATM revenue (KShs M)
95 126 120
1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19
10 11.2
POS Revenue (KShs. M) V alue of Transactions (KShs.B)
12
OUR CHANNEL CONTRIBUTION
202 232 221
17%
reduction in the average value of Merchant/ POS transactions
16 1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19
BALANCE SHEET HIGHLIGHTS
Customer Deposits Net Loans & Advances Total Assets
KShs 647.5B 12% Total Assets growth
KShs 112.1B KShs 418.6B KShs 496.4B
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1Q18 1Q19
LOAN BOOK PERFORMANCE
11%
Growth in Net Loans and Advances
Sectoral Loans Comparison
462 503 20 18 3
Mar-18 Retail Corporate Mortgage Mar-19 * Group gross loans KShs.B
81% 19%
LCY FCY
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26.0% 15.5% 13.0% 4.8% 18.9% 3.6% 6.8% 2.6% 4.7% 3.7% 0.4% 36.0% 19.0% 12.0% 6.0% 7.0% 5.0% 5.0% 4.0% 3.0% 3.0% 0.0% Personal/Household Real estate Manufacturing Building and construction Trade Financial Services Transport and communication Tourism, restaurants and hotels Energy and water Agriculture Mining and Quarrying Industry Sept 2018 KCB Mar 19
LOAN BOOK PERFORMANCE
7.7%
Asset quality improvement Asset Quality Review NPL Breakdown
7.8% 9.5% 11.8% 12.8% 1.6% 1.0% 0.6% 1.0% 8.5% 7.9% 9.8% 7.7%
Q1 2016 Q1 2017 Q1 2018 Q1 2019 Industry NPL (Kenya)
89% 11%
LCY FCY
3.2% 7.4% 14.8% 16.3% 3.4% 9.5% 10.5% 15.6%
CHECK OFF MORTGAGE CORPORATE SME & MICRO Q1 2018 Q2 2018 FY 2018 Q1 2019
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LOAN BOOK PERFORMANCE
11%
Decrease in stock of Non- Performing Loans
32,151 43,775 38,824 79.6% 62.9% 63.9% 43.3% 61.0% 60.8%
30.0% 60.0% 90.0% 120.0%
20,000 30,000 40,000 50,000 1Q17 1Q18 1Q19 Gross NPL Central Bank Coverage Ratio IFRS Coverage Ratio
Improved IFRS Coverage 21
BALANCED FUNDING STRUCTURE
50% 50% 51% 48% 48% 48% 2% 2% 1%
1Q17 1Q18 1Q19 Corporate Retail Other
Currency Mix Customer deposits mix 1Q18 Customer deposits mix 1Q19
88% 12%
LCY FCY
64% 6% 24% 6%
Demand Savings Term Call
62% 6% 24% 8%
22 Customer deposits segmentation
STRONG CAPITAL BUFFERS
Core Capital to RWA T
Kenya Kenya Group Group
10.5% 10.5% 10.5% 14.1% 15.1% 18.6% 1Q17 1Q18 1Q19 14.5% 14.5% 14.5% 17.0% 15.3% 20.0% 1Q17 1Q18 1Q19 10.5% 10.5% 10.5% 14.1% 15.0% 16.4% 1Q17 1Q18 1Q19 14.5% 14.5% 14.5% 18.7% 15.0% 17.7% 1Q17 1Q18 1Q19
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P&L HIGHLIGHTS 11% earnings growth to KShs 5.8B
Net interest income Profit before tax Operating Expenses (excl. Provisions) Total non Interest Income
KShs 11.4B KShs 5.5B KShs (8.9B) Profit before tax Up 14% KShs 7.5B
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1Q18 1Q19
International Businesses highlights 13% growth in Net Loans and Advances
1Q18 1Q19
352 703 1,305 2,672 6,498 6,192 12,986 13,491 13,603 16,373
Net Loans & Advances PBT KCB Bank South Sudan KCB Bank Burundi KCB Bank Uganda KCB Bank Rwanda KCB Bank Tanzania
(425) 115 (127%) 51 73 49 (138) 142 103 162 224 43% (382%) (27%) 38%
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Strong balance sheet driven by KShs 46B growth in net loans
KShs Billion KCB Group KCB Bank Kenya Actual 1Q18 Actual 1Q19 Y-O-Y Change Actual 1Q18 Actual 1Q19 Y-O-Y Change Cash and balances with central bank 33.8 56.3 67% 30.4 35.0 15% Balances with other institutions 37.1 19.4 (48%) 10.0 11.1 11% Investments in Government & Other securities 112.1 133.3 19% 96.6 118.0 22% Net loans and advances 418.6 464.3 11% 383.9 424.8 11% Fixed assets 14.4 13.9 (3%) 10.1 10.0 (1%) Other assets 31.4 38.5 23% 29.9 35.6 19% Total Assets 647.5 725.7 12% 560.9 634.5 13% Customer deposits 496.4 555.2 11% 438.7 491.0 12% Balances due to other banks 9.5 9.5 (0%) 4.7 0.9 (81%) Other liabilities 19.4 23.0 18% 22.0 21.3 (3%) Long-term debt 22.5 21.5 (5%) 18.4 18.7 2% Total Liabilities 547.8 606.2 11% 483.9 531.9 10% Shareholders’ equity 99.6 119.5 20% 77.0 102.6 33% Total liabilities and equity 647.5 725.7 12% 560.9 634.5 13%
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KShs Billion KCB Group KCB Bank Kenya Actual 1Q18 Actual 1Q19 Y-O-Y Change Actual 1Q18 Actual 1Q19 Y-O-Y Change
Interest income 15.7 16.8 7% 14.0 15.0 7% Interest expense (4.2) (4.1) (4%) (3.5) (3.4) (3%) Net interest income 11.4 12.7 11% 10.5 11.6 10% Foreign exchange income 1.0 1.0 0% 0.7 0.6 (6%) Net fees and commissions 3.6 4.0 12% 2.7 3.5 29% Other income 0.9 1.0 16% 0.8 0.9 13% Total other operating income 5.5 6.0 9% 4.2 5.0 20% Total other operating expenses (8.8) (9.1) 2% (6.7) (7.4) 10% Provisions for bad debts (0.6) (1.2) 94% (0.5) (1.0) 100% Profit before tax 7.5 8.5 14% 7.4 8.2 10% Tax (2.3) (2.7) 18% (2.0) (2.6) 25% Profit after tax 5.2 5.8 11% 5.4 5.6 4% 11% GROWTH IN EARNINGS
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OVERVIEW OF KEY FINANCIAL RATIOS
Return on Average Equity Cost to Income Gross NPL to Gross Loans NPL Coverage Debt to Equity Non funded income to total income Cost of funds Net Interest Margin Cost of risk Loan to Deposit Ratio Growth of Net Loans and Advances Growth of Customer Deposits
19.5% 21.9% 49.1% 48.3% 9.8% 6.9% 61.0% 72.4% 22.6% 19.7% 32.7% 32.0% 3.2% 3.2% 8.6% 8.1% 0.6% 0.7% 84.3% 84.8% 4% 8% 9% 8% 21.9% 48.5% 7.7% 60.8% 18.0% 32.2% 2.8% 8.5% 1.0% 84.1% 11% 11% FY17 Q1 18 FY 18 KENYA GROUP 19.5% 51.0% 8.5% 72.5% 14.0% 32.2% 3.0% 8.9% 1.5% 85.1% 10% 11% 22.7% 44.8% 8.1% 64.9% 18.3% 30.2% 2.8% 8.1% 0.9% 86.5% 10.7% 11.9%
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2019 OUTLOOK Non funded income growth 25.0% NFI Ratio 34.0% Cost/ Income ratio 47.0% Operating expenses 6.0% Cost of funds 3.0% Cost of Risk 1.2% NPL Ratio 7.0% NIM 8.3% Asset yield 11.3% Loan growth 9.0% Deposit growth 9.0% ROA 3.60% ROE 23.0%