Q3 2019 INVESTOR PRESENTATION WHAT DRIVES US HOW WE WHO WE ARE - PowerPoint PPT Presentation

Q3 2019 INVESTOR PRESENTATION

WHAT DRIVES US HOW WE WHO WE ARE ACHIEVE IT OUR STRATEGY Simplified customer Our Purpose Customer perspective journey Simplifying Market share your world to Shared value enable your Brand position Digital first and fast progress Financial Optimize balance Profit before tax Efficiency sheet and drive asset Shareholder value 2015-2019 STRATEGY: quality TRANSFORMATIVE Our Promise Maximize on regional Internal Business PARTNERSHIPS Go Ahead businesses processes System reliability Sustainability Operational efficiency Control environment Our Values Learning and growth Inspiring Sustainability Staff productivity Simple Staff development agenda Friendly Culture change 2

CUSTOMERS 21.2 MILLION OUR REGIONAL 258 BRANCHES PRESENCE 973 ATMS, 20,561 AGENTS & MERCHANTS STAFF Banking Businesses: • KCB Bank Kenya 6,195 FTE • KCB Bank Tanzania • KCB Bank South Sudan • KCB Bank Rwanda KCB BANK KENYA • KCB Bank Uganda (ETHIOPIA REPRESENTATIVE • KCB Bank Burundi KCB BANK OFFICE ) SOUTH • Ethiopia Rep. Office SUDAN Other Investments: KCB BANK KCB BANK KENYA UGANDA • KCB Capital Limited KCB INSURANCE AGENCY KCB FOUNDATION • KCB Insurance Agency KCB CAPITAL • KCB Foundation KCB BANK RWANDA • Kencom House Limited KCB BANK KCB BANK BURUNDI TANZANIA 3

Ethiopia OUR FOOTPRINT Branches 11 South ATMs 3 (Representative Office Sudan Staff 123 with 1 staff) Agents 25 Touch Points: Branches 15 Uganda ATMs 18 Staff 328 Branches 201 Agents 450 ATMs 371 Kenya Staff 5,065 Branches 14 Agents 12,213 ATMs 25 Rwanda Staff 260 Agents 324 Branches 14 ATMs 16 T anzania Branches 5 Staff 291 ATMs 7 Burundi Agents 125 Staff 127 Agents 185 4

KShs. 104.8 Bn REGIONAL Total KShs. 121.2 Bn Equity MARKET LEADER Q3 2018 NO. 1 Q3 2019 Net Loans BANK Total and Assets IN THE Advances KShs. 435.3 Bn KShs. 684.2 Bn REGION KShs. 486.4 Bn KShs. 764.3 Bn KShs. 526.8 Bn Customer Deposits KShs. 586.7 Bn 5

STABLE CREDIT RATINGS RATING AGENCY SOVEREIGN KCB BANK KENYA Ratings confirmed in August and September 2019 B2 (Stable) B2 (Stable) B+/B B+/B No deviation in rating from 2018 6

MACRO ECONOMIC HIGHLIGHTS

MACRO ECONOMIC HIGHLIGHTS Contribution to GDP Q219 (%) Q219 Growth (%) Kenya 23.1 11.6 9.7 8.2 7.1 7.2 7.2 6.7 5.6% 6.0 5.8 5.7 5.4 5.5 5.2 6.9 5.9 6.8 4.2 3.6 4.1 1.8 0.9 AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL & CONSTRUCTION ICT HEALTH MINING& ESTATE STORAGE INSURANCE QUARRYING Q2 19 GDP Growth Rate (%) *Source: Kenya National Bureau of Statistics 8

MACRO ECONOMIC GDP Growth 2019 Projected (%) HIGHLIGHTS Regional GDP Growth 7.8 7.7 6.6 5.5 6.2 2.3 South Sudan Ethiopia Rwanda Tanzania Uganda Burundi 2018 East Africa -2.6 GDP Growth Rate( % ) *Source: AfDB, Africa Economic Outlook Source: AfDB, WEO 2019,WB 9 2019

Inflation Evolution(%) 7.5 6.27 MACRO ECONOMIC 5.70 5.58 5.49 HIGHLIGHTS 4.70 4.35 3.83 2.5 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Upper Limit Inflation Lower Limit Interest Rate Evolution (%) 12.7 12.61 12.47 12.47 9.0 7.63 7.56 7.36 7.34 7.39 7.19 7.08 7.17 7.02 6.90 6.62 6.44 6.35 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 91 day T-Bill Avg Lending Rate CBK Rate 10

USD/KES Exchange Rate MACRO ECONOMIC 103.8 103.3 103.2 HIGHLIGHTS 102.6 102.3 101.8 101.7 101.6 101.2 101.1 101.1 100.4 100.2 Stable Currencies across the region SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP 2 0 1 8 2 0 1 8 2 0 1 8 2018 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2019 2019 Exchange Rates to USD 3,765 3,684 2,289 1,863 2,261 1,783 910 864 221 160 28 27 Rwanda Ethiopia Tanzania Burundi South Uganda Sudan Q3 18 Q3 19 11

CURRENT ACCOUNT BALANCE (% OFGDP) MACRO ECONOMIC HIGHLIGHTS -4.2 -4.5 -4.8 -5.0 -5.5  Tourist arrivals remained -6.2 -6.7 strong. Maintained peaks seen in 2018. Good for the -10.5 hotel industry and Foreign 2018 2019 July 2019 exchange source. 2014 July 2018 2015 2017 2016 Projected  Average forward hotel Imports grew at a slower pace in the 12 months to July 2019 mainly bookings for September to TOP IMPORTS ($M) due to lower imports of food and SGR equipment. December 2019 were 4,432 higher relative to a similar 3,421 period in 2018 2,927 1,631 1,187 Manufactured Machinery and Others Food Petroleum goods equipment 12

12 Month Private Sector Credit Growth 6.3 6.1 5.2 MACRO ECONOMIC 4.4 4.3 4.3 HIGHLIGHTS 2.4 Kenya Aug-18 Oct-18 Dec-18 Mar-19 Jun-19 Jul-19 Aug-19 Aug-18 Oct-18 Dec-18 Mar-19 Jun-19 Jul-19 Aug-19 MPC Market Perception 4.3 4.4 2.4 4.3 5.2 6.1 6.3 Survey conducted in Overall Private Sector Credit 11.5 7.6 11.0 13.9 21.3 23.6 23.0 Consumer durables September 2019 showed 2.7 5.1 6.8 8.0 7.6 7.1 8.6 Private households increased optimism on 6.9 4.0 2.9 8.7 5.5 8.0 8.4 Trade the economic growth 13.2 14.8 6.5 7.2 11.4 10.3 7.5 Manufacturing -4.3 -5.6 -2.0 0.2 3.9 7.6 6.6 prospects Agriculture 3.5 9.1 17.5 10.2 4.7 5.3 6.3 Finance and Insurance -11.0 -7.7 -9.4 5.7 5.8 6.4 5.8 Transport and Communication Consumer durables 0.9 1.2 -0.5 -0.1 1.0 0.5 2.4 Real estate leading by far the main 6.5 12.1 8.0 -0.4 -3.2 1.6 1.0 Business services drivers for credit growth 14.7 7.1 1.8 -7.0 -6.3 -5.4 -6.0 Building and Construction -9.1 -11.6 -10.7 -11.4 -4.3 -13.5 -10.8 Mining and quarrying -4.6 -12.4 -34.8 -31.7 -22.6 -17.2 -14.4 Other activities 13

Diaspora Remittances (USD Millions) MACRO ECONOMIC HIGHLIGHTS 350 295.32 300 266.19 250 224.49 8% 215.56 215.27 214.31 214.7 200 166.41 154.88 152.31 Cumulative inflows 150 in the 12-months to September 100 2019: $ 2,786M 50 2018: $ 2,579M 0 June July August June July August June July August Sept 2017 2018 2019 14

YEAR TO DATE OVERVIEW

• Renewed focus on the sector following the repeal of the interest rate cap. 2019 KENYA The target is to only marginally increase lending rates by not more than HIGHLIGHTS 300bps thus including customers previously cut from the lending universe. The Banking Sector • The Central bank concluded the withdrawal of the older 1,000 shillings banknotes and introduced new notes. After the demonetization exercise, which had little impact on inflation or the exchange rate, KShs. 7.4 billion, or 3% of the total value in circulation of 1,000 notes, was rendered worthless. 16

• KCB completed the take-over of National Bank of Kenya Limited (details on slide 41) 2019 KENYA HIGHLIGHTS • The merger of CBA Limited and NIC Group PLC to form NCBA, was effective as of 30 th September 2019, following attainment of all The Banking Sector regulatory approvals. 17

AGRIBUSINESS KCB 2JIAJIRI 14,244 BUILDING AND PROGRAMME CONSTRUCTION 5,725 BEAUTY AND HIGHLIGHTS PERSONAL CARE AUTOMOTIVE 2,542 ENGINEERING 1,579 DOMESTIC SERVICES FUTURE OF 2JIAJIRI 1,249 Catalyze job and wealth creation for at least 2,000,000 youth engaged in the informal 27,139 sector within Eastern Africa BENEFICIARIES TO DATE 5-year investment of over Kenya KShs 50 billion 25,339 to nurture and grow youthful and SME Tanzania Male : Female Ratio entrepreneurs 1,500 Rwanda 300 ‘Young Africa Works’ 54:46 KShs 10 billion funding from the MasterCard Foundation to scale up the bank’s 2jiajiri job creation programme 18

Innovative Agri Entrepreneurs: Greenlife Veggies – Simon Muriithi and friends KCB FOUNDATION • CASE STUDIES Armed with skills from 2jiajiri agribusiness training, they established a lettuce growing business that inculcated the hydroponics farming technology. • Signed a five-year sub-award contract with an aggregator and off-taker. From dilapidated structure to modern salon – Irene Wangari • Irene trained in hairdressing and beauty at Nyeri National Polytechnic under 2jiajiri. • Funding from KCB Foundation moved her from deplorable premises with obsolete equipment and revamped her business at Skuta area in Nyeri that currently earns her over KShs 40,000 monthly profit. 19

Mainstreaming our 8 Adopted SDG’s • 182 Business Bankers, Relationship SUSTAINABILITY Managers and Credit Analysts UPDATE trained on Environmental, Social Risk screening and Assessment. • 90.5% of business units have identified key performance indicators for tracking and monitoring of the 8 SDG’s. UNEP FI – 6 Principles for RESPONSIBLE BANKING: Launched on 23 Sept. 2019 in New York Impact & Clients & Alignment Target Setting Customers Transparency Governance Stakeholders & & Culture Accountability 20