Standard Chartered Bank Kenya Limited Full Year 2019 Results 19 March 2020
Kariuki Ngari Chief Executive Officer 1
We are delivering on our strategic commitments We have achieved important milestones on our strategic priorities in 2019 • The significant investment in Digital is starting to pay-off Deliver our network • We continue to cement our leadership in Wealth Management as we grow our affluent business Transform Grow our • Our Network continues to be a unique differentiator and disrupt affluent with digital business Purpose and • There is encouraging progress optimising performance in the people Commercial Banking segment • We are building a more skilled and productive workforce and Optimise enabling client-centric ways of working Improve low- productivity returning segments • We are taking bold actions to promote sustainable economic and social development 2
Our purpose drives our business decisions and priorities Our purpose: Driving commerce and prosperity through our unique diversity We will lead sustainable We understand our We support the We will maximise responsibilities financing communities where we return from investment work and live in our people • Launched ‘Futuremakers’ to • Building skills of future • Committed to providing • Promoting a safe and strategic value including advisory, financing and tackle inequality and sound financial system promote inclusion analytics, digital and debt structuring service for cyber capabilities infrastructure projects and ▪ Invested KES 27 million clean technologies ▪ Involved 30 companies • We are creating a • Through our Goal working environment programme, engaged that supports resilience >4,400 girls in training and creativity • Launched Women In Tech Incubator cohort 3 3
We are positioned to transform and disrupt with digital … Strategic priorities Financial information We have … Launched the Retail Digital Bank • 70 services on the SC Mobile app Digital Cost-effectiveness and time-efficiency Increasingly how Handling 52% of service requests • Digitise client journey clients are engaging Banking made easier 85% transactions conducted in non-branch channels Contact Centre 15% of total cost base is digital investment Expand accessibility Enabling higher- 48 corporate cash deposit machines (CDMs) value client solutions Branches Enhanced the Corporate online banking platform Fewer / smaller Straight2Bank Advisory business Our direction For more complex of migration c.70% of corporate clients’ FX volumes done transactions online via SARFQ 1 Investment spend 1 SARFQ = stand alone request for quote functionality in Straight2Bank 4
… and are seeing encouraging early signs of progress Strategic priorities Financial information Future initiatives Recent progress Mobile lending (including SME) 26k+ accounts opened through the SC Mobile platform in 9 months Enhanced CDM capabilities and increased count 2x improvement in sales/rate of account opening Remote cheque deposit capabilities E-commerce and API integration 10%+ increase in digital penetration across all segments 3K manhours saved through Robotics Process ACCOLADES Automation in operations Best Digital Consumer Bank, 2019 by Global Finance. 30% growth in KRA collections through our Straight2Bank online banking platform in 2 years. Best Overall Bank and Best Tier 1 Bank, KBA Customer Satisfaction survey Outstanding Customer Experience, The Digital Banker 5
We continue to cement our leadership Wealth Management in Kenya Strategic priorities Financial information Available on SC Mobile App • Home, Motor, Travel and Farewell insurance • Local currency Treasury Bills (T-bills) and Bonds • Offshore mutual funds with renowned global fund managers • Foreign exchange transactions in major international currencies. • Latest global market insights and investment advice 6
We are developing best-in-class capabilities Strategic priorities Financial information Recent progress Future initiatives Gone live in 2020 on mobile for: • Increase uptake of existing digital products (FX, • Fixed Income (local currency T-bills and Bonds) Investments and Insurance) • Farewell insurance plan (Funeral cover) • Scale up the digital offering to introduce more KES 250Mn+ investment in digital in 2019. products and services • Continue upskilling wealth advisers 55% growth in AUM (3-year CAGR) • Increase product penetration by 25% among 28% increase in revenue per headcount – due to digital existing clients 100+ Certified wealth advisers Wealth AUM (KES bn) 69 55%+ CAGR 51 38 19 31.12.16 31.12.17 31.12.18 31.12.19 7
Our global network is a key differentiator Strategic priorities Financial information SCB global network Recent progress • KES 5Bn+ financing to SME distributors Europe & In: 71% of MNCs (ecosystem) Americas Out: 44% • 60% of CIB income is generated from the network. Africa & In: 14% SCB Out: 44% Kenya Middle East • 15% y/y growth in Outbound income. • 30% y/y growth in China corridor network Greater income, 25% 3-year CAGR. In: 10% China & Out: 2% North Asia • 9% 3-year CAGR in network income ASEAN & In: 5% SCBK Network Revenue (KES Bn) Out: 10% South Asia 8.2 7.7 7.0 6.4 3.1 2.7 2.1 1.6 5.1 4.9 5.0 4.8 FY'16 FY'17 FY'18 FY'19 • Inbound: Flows to Kenya from clients headquartered elsewhere in our network • Outbound: Flows to our network from clients headquartered in Kenya 8 Inbound Outbound • Rev: FY19 revenue
Optimising low-returning segments and Improving productivity Strategic priorities Financial information Recent progress On-going initiatives • Digitisation of credit decisioning • CB has turned around to profitability, 2019 PBT at KES 529Mn (2018: KES 9Mn loss); • Enhancement of the branch network – area, look and feel • continued improvement in credit quality • accelerated new-to-bank client acquisitions • Robotics Process Automation to improve • innovative solutions such as ‘Ecosystem’ efficiency • Broad-based improvement in productivity across the bank with 13% increase in revenue per FTE • 50%+ reduction in client manual service requests due to enhanced digital self-service options • Significant improvement in CCIB turnaround time in: • client onboarding (1 week), and • credit initiation to decisioning (<30 days) CB = Commercial Banking segment PBT – Profit before tax FTE = full time employee 9 CCIB = Corporate, Commercial & Institutional Banking
We are investing to enhance our cyber security and financial crime compliance (FCC) capabilities Strategic priorities Financial results Training • Increased training and awareness among staff and clients Enhanced capabilities Enhanced operating model • investments undertaken to further • to clarify accountabilities between the first and enhance our cyber security second lines of defence • enhanced our transaction monitoring capabilities through investment in a new surveillance system Recovery drills • crisis management exercises to ensure business responses with focus on clients and critical services 10
Our approach to Sustainability We support our clients through our core business to promote sustainable development We strive to manage our business sustainably and responsibly We aim to create a more inclusive Sustainability Priorities economy by sharing our skills and expertise, and developing community Three priorities that embed programmes that transform lives sustainability in our business, organisation and communities 11
Promoting Sustainable Finance Our commitments Managing environmental and social risks responsibly • We are a signatory to The UN Sustainable • Partner with the government and other private Development Goals (SDGs) sector participants • Greatest opportunities in Kenya will be in: • Provide financing for clean technologies • Achieving and maintaining universal access to electricity (SDG 7) • Provide advisory, financing and debt structuring services for infrastructure projects • Improvement in industry, innovation and infrastructure (SDG 9) • Clean water and sanitation facilities (SDG 6) SDG = United Nations Sustainable Development Goals 12
Chemutai Murgor Chief Financial Officer 13
Financial performance in FY’ 2019 Strong capital and improving profitability Strategic priorities Financial results FY’19 YoY 1 (KES bn) FY’18 28.7 Operating income 28.6 0% • Income broadly flat reflecting focus on balance (15.9) Operating expenses (14.9) (7%) sheet quality (0.6) Net impairment losses (1.9) 83% 12.2 Profit before taxation 11.8 3% • Investing in technology, cyber security and people 8.2 Profit after taxation 8.1 2% • Continued improvement in credit quality 23.49 Basic earnings per share (KES) 23.09 2% • Improved profitability leading to higher EPS 31.12.19 31.12.18 128.7 Loans and Advances to customers (net) 8% • Steadily growing balance sheet, with focus on 118.7 sustainable growth 228.4 Deposits from customers 224.3 2% 17.73 • Strong capital and liquidity position with prudent Total capital ratio (%) 19.47 (1.74) surplus to regulatory requirements 63 Liquidity ratio (%) 67 (4.04) AD 2 ratio (%) 56 53 3.43 1 YoY = year-on-year variance is better/(worse) other than for balance sheet items, which is increase/(decrease) 14 2 AD = Assets to Deposits
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