supplementary slides 2 Revenue split NET INTEREST INCOME * = 60% - - PowerPoint PPT Presentation

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supplementary slides 2 Revenue split NET INTEREST INCOME * = 60% - - PowerPoint PPT Presentation

Apr 23, 2023 26 likes •261 views

1 supplementary slides 2 Revenue split NET INTEREST INCOME * = 60% NON-INTEREST REVENUE = 40% Transactional NIR # 27% Lending Transactional NII ** 21% Flow trading and residual risk Capital endowment UK operations 16% transactional

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supplementary slides

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Revenue split

21% 16% 3% 6% 4% 9% 27% 4% 4% 3% 0% 2%

CLIENT FRANCHISE = 97%

INVESTING AND RISK INCOME = 3%

* Includes other net interest income not included in bar graph. ** Includes transactional accounts and related deposit endowment, overdrafts and credit card.

#

From retail, commercial and corporate banking.

†

Includes all associates other than those relating to Private Equity.

NET INTEREST INCOME* = 60% NON-INTEREST REVENUE = 40%

Lending FNB rest of Africa Transactional NII** Deposits Capital endowment Transactional NIR# Investment banking transactional income Insurance Other client† Investing Flow trading and residual risk UK operations

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Drivers of topline

p6% p6% p4% p7% q2% q5% 5 000 10 000 15 000 20 000 25 000 30 000 Lending Transactional NII Capital endowment UK operations Transactional NIR Insurance GROSS REVENUE R million

NET INTEREST INCOME NON-INTEREST REVENUE

2019 2020

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62% 30% 4% 4%

Normalised earnings per operating business†

WesBank RMB FNB

* Based on gross revenue excluding consolidation adjustments. Excludes Aldermore. ** Includes deposit taking and investment management.

#

Includes Group Treasury, Group Support and Ashburton, excludes remainder of FCC, FirstRand company and consolidation adjustments.

†

Excludes FCC (incl. Group Treasury), FirstRand company, consolidation adjustments and dividends on other equity instruments.

‡

Includes Aldermore group and MotoNovo standalone (i.e. new and back book).

UK operations‡ 83% 12% 5% UK Rest of Africa

Geographic PBT mix# (i.e. pre-minorities)

South Africa and other Transact Lend Insure Save and invest** Other

Revenue split by activity*

Investing Transact and lend = 87%

Current portfolio mix – activity, geography and business

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(4 000) (2 000) 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 Transactional Term lending Save and invest Insurance Rest of Africa Other

Activity view of FNB performance

* Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. ** Save and invest includes non-transactional deposits.

#

Insurance includes embedded credit life.

† 2019 figures have been restated for intergroup reallocations.

2019† 2020 NORMALISED PBT R million

#

** †

p8% q63% q18% q18% q32% q43%

**

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Deposit values

Deposit values (excl. cheques) – branches vs ADTs

10 20 30 40 50 60

Deposit values – smartbox vs cash centres

10 20 30 40 50 60 Smartbox Cash centre Branch ATM/ADT VALUES R billion VALUES R billion

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Recalibration of branch network continues

  • Branch costs

(2%)

  • Average branch m2

(3%)

  • Commitment to outcomes-based

remuneration continues to pay off and allows the branch network to flex in line with market conditions

  • Branch fitment is more cost-

effective as the customer becomes more digitised allowing for a smaller footprint and more “tellerless” branches

  • Average new branch configuration

based on 200m2 is R4.25m

  • Leveraging branch footprint for

commercial client engagement

  • Electronic channels
  • Automated teller minutes (5%)
  • Growth in ADT

device cash value (2%)

  • Service related activities (26%)
  • Telling activities

(13%)

  • Sales activities

6%

  • Digital capabilities in branch

activations

  • App

+16%

  • Online

(26%)

  • There is an intended effort to

ensure all customers are enabled via the app as the primary user interface

INFRASTRUCTURE COST REDUCTION INVESTMENT TO TAKE OUT MORE COSTS FOCUS ON GROWTH IN LONG-TERM COSTS

  • Staff costs

+1%

  • Long-term leases

(1.9%)

  • Rationalise:
  • Property portfolio
  • Operational processes across

delivery channels

  • Moving towards more retail

locations

  • Consolidation of cash related

activities

Percentages shown above relate to year-on-year changes for points of presence.

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Platform origination

50 100 150 200 250 300 2018 2019 2020 200 400 600 800 1 000 1 200 2018 2019 2020

q55%

200 400 600 800 1 000 1 200 1 400 2018 2019 2020

* Includes new origination, upgrades and existing product limit increases. ** Accepted offers may not have been fulfilled.

Number of digital sales (thousands)* Number of accepted offers (thousands)** Number of accepted offers**

Card nav» Home Investing Insurance p97% p19% p74% p98% q31%

1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 2018 2019 2020 Pay-out value (R million)

p>100% p25%

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Commercial

2 000 4 000 6 000 8 000 10 000

Online

Transaction volumes (thousands) 2 000 4 000 6 000 8 000 10 000 Banking app Online Monthly logins (thousands) 100 000 200 000 300 000 400 000 500 000 600 000 700 000 Banking app Online Number of customers

2020 2019

Active customer base Platform adoption continues

p18% p5% p82%

50 000 100 000 150 000 200 000 250 000 300 000 2019 2020 Turnover (R million)

Merchant services

p1%

Digital platforms support volume growth

q35%

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Advances

25.9 16.7 8.3 7.5 4.6 4.4 2.7 2.2 15 30 45 2019 2020 Retail other Card FNB loans Residential mortgages FNB CONSUMER ADVANCES* R billion

* Excluding DirectAxis.

q36% y/y q9% y/y 191.2 207.7

15.1

15.9 23.5 25.8

15.2

14.6

30 60 90 120 150 180 210 240 270 2019 2020 Debt relief loans Retail other Card FNB loans Residential mortgages FNB PREMIUM ADVANCES R billion p6% y/y p10% y/y p9% y/y q4% y/y q21% y/y q26% y/y q4% y/y p9% y/y

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Commercial advances

FNB COMMERCIAL ADVANCES R billion 5 10 15 20 25 30 35 Agric Property Business core banking Asset-based finance Specialised finance Other 2019 2020 q5% p3% p6% p8% p17% q4%

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FNB rest of Africa

2 374 (689) 1 979 (830) (900) (400) 100 600 1 100 1 600 2 100 2 600 Mature subsidiaries Emerging subsidiaries q17% NORMALISED PBT R million

**

q20%

* Mature subsidiaries: Botswana, Namibia, Eswatini (mature subsidiaries’ performance shown gross of minority interests). ** Emerging and start-up subsidiaries: Lesotho, Mozambique, Zambia, Tanzania, Ghana and support (excludes India).

#

2019 figures have been restated for intergroup cost recoveries and funding.

*

2019 2020

#

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RMB performance split between SA and rest of Africa

(100) 300 700 1 100 1 500 1 900 2 300 2019 2020 (600) 1 900 4 400 6 900 9 400 2019 2020

* Strategy view including in-country and cross-border activities. ** Includes investment management and other central portfolios.

RMB SOUTH AFRICA AND OTHER NORMALISED PBT R million REST OF AFRICA* NORMALISED PBT R million IB&A C&TB M&S Other** Investing p9% p 2% q 18% q 6% q 34% p66% q 22% q >100% p19%

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CIB rating profile

WHOLESALE CREDIT PERFORMING BOOK 34% 34% 63% 59%

3% 7%

2019 2020 Investment grade Sub-investment grade Elevated risk

  • Proactive migration of counters

based on expected adverse impact

  • f COVID-19
  • Increased portfolio coverage

ratio of 175 bps reflects COVID-19 impact

  • Cross-border up 12% in

dollar terms

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Rate mix in WesBank retail VAF book

PROPORTION OF WESBANK RETAIL VAF NEW BUSINESS % OF TOTAL ADVANCES Jun 20 Jun 19 Fixed rate 35 40 Floating rate 65 60 67% 63% 49% 40% 49% 51% 38% 33% 43% 33% 37% 51% 60% 51% 49% 62% 67% 57% 0% 10% 20% 30% 40% 50% 60% 70% 80% Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Fixed rate Floating rate

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WesBank credit portfolios

CORPORATE AND COMMERCIAL

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 Dec 19 Jun 20 Impairment charge (R million) Credit loss ratio Long-run credit loss ratio = 1.40%

  • 0.5%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% (100) 100 200 300 400 500 Dec 09 Jun 10 Dec 10 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Jun 16 Dec 16 Jun 17 Dec 17 Jun 18 Dec 18 Jun 19 Dec 19 Jun 20 Impairment charge (R million) Credit loss ratio Long-run credit loss ratio = 1.0%

Impairment charge Credit loss ratio RETAIL VAF

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Aldermore funding breakdown

FUNDING COMPOSITION £ million 8% 1.50% 1.62% 1.67% 1.68% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 Dec 18 Jun 19 Dec 19 Jun 20 Retail Business Corporate Institutional Cost of funds* 55% 16% 7%

* Cost of funds: annual interest expense over average net loans (average between opening and closing balance for the period).

22% COST OF FUNDS %

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Residential mortgage portfolio

Geographical distribution of residential mortgages

1% 15% 24% 19% 24% 10% 3% 4% 0% 0% 0 - 50k 50k - 100k 100k - 150k 150k - 200k 200k - 300k 300k - 400k 400k - 500k 500k - 1m 1m - 2m 2m+ 49% 12% 10% 8% 10% 9% 2% 0 - 70% 70 - 75% 75 - 80% 80 - 85% 85 - 90% 90 - 95% 95+%

* Loan to value on indexed origination. ** Guarantee refers to mortgages guaranteed by the UK Government’s Help to Buy scheme (pre-2016) or the Mortgage Indemnity Guarantee (post-2016).

97% of balances >85% LTV covered by guarantee**

59% of the portfolio has a balance <£200k Average LTV* of non-guarantee book is 58%

4% 18% 17% 11% 14% 9% 9% 11% 7%

Greater London South East Midlands East Anglia North West South West Yorkshire Scotland Other

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Buy-to-let portfolio

32% 24% 8% 11% 7% 7% 4% 7%

Greater London South East Midlands East Anglia North West South West Yorkshire Other 1% 13% 13% 12% 23% 17% 7% 9% 3% 2% 0 - 50k 50k - 100k 100k - 150k 150k - 200k 200k - 300k 300k - 400k 400k - 500k 500k - 1m 1m - 2m 2m+ 56% 24% 14% 4% 1% 1% 0 - 70% 70 - 75% 75 - 80% 80 - 85% 85 - 90% 90+

* Loan to value on indexed origination.

Geographical distribution of buy-to-let mortgages c.78% of loans at £50k – £400k, with only 5% >£1 million Average LTV* of 66%, with only 6% of balances >80% LTV

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Asset finance

Geographical distribution of asset finance portfolio

9% 18% 17% 12% 14% 9% 7% 6% 8%

Greater London South East Midlands East Anglia North West South West Yorkshire Scotland Other

40% 20% 16% 13% 6% 5%

0 - 50k 50k - 100k 100k - 200k 200k - 500k 500k - 1m 1m+

Majority of portfolio has an average balance of <£100k

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MotoNovo (VAF) portfolio

Geographical distribution of portfolio

7% 33% 32% 16% 6% 5%

0 - 5k 5k - 10k 10k - 15k 15k - 20k 20k- 25k 25k+

Majority of portfolio has an average balance of £5k-£15k

9% 9% 11% 8% 12% 10% 16% 7% 9% 9%

East Anglia Greater London North West Scotland South East South West Midlands Wales Yorkshire Other

Note: Bar graph is based on rounded numbers.

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UK operations market share

Residential mortgages** Buy-to-let mortgages** MotoNovo Standalone# RETAIL Commercial mortgages## Invoice finance** Asset finance† COMMERCIAL/SME

£5bn 10.4% £21bn 2.0% £44bn 1.0% £42bn 1.3% £218bn < 1%

ORIGINATION MARKET SIZE* AND UK OPERATIONS’ ESTIMATED SHARE

* Estimated FY 2020 market size based on most recent data ** Sources: UK Finance, Aldermore estimates

#

Sources: FLA Motor Finance Summary

# # Sources: Cass Year End 2019 CRE Lending Survey, Aldermore estimates †

Sources: FLA Broker Market data, Aldermore estimates

UK operations’ estimated share Rest of market

£16bn 11.0%

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Current origination model

Residential mortgages Buy-to-let mortgages MotoNovo Standalone RETAIL Commercial mortgages Invoice finance* Asset finance COMMERCIAL / SME

JUNE 2020 ALDERMORE ORIGINATION BY CHANNEL

* Direct includes referral.

97% 3%

£0.7bn

87% 13%

£0.6bn

77% 23%

£0.9bn

41% 59%

£0.2bn Direct Intermediated

58% 42%

£0.4bn

9% 91%

£1.7bn