abch results presentation june 2013 v6
TRANSCRIPT
ABC Holdings Limited
Interim Group Results for the six months
ended30 June 2013
2
- Highlights
- Economic review
- Operational overview
- Financial review
- Strategy and outlook
Agenda
3
DOUG MUNATSI
Highlights
4
Financial highlights
• The Group posted a pleasing set of results as diversification of our business into retail banking is beginning to bear fruit
• Competitive position of the Group improving in most markets
Delivering on our strategy:
Financial highlights
H1:13 H1:12 % ∆Attributable profits (BWP’ m) 143 56 157%
Basic EPS (thebe) 59.1 37.2 59%
NAV per share (BWP)
5.54 4.15 33%
Dividend per share (thebe) 14.0 8.0 75%
5
Solid set of results all round, with attributable profits for the first 6 months being 8% better than 2012 full year profits of BWP133m
Financial highlights
H1:13 H1:12 PAT (BWP’ m) 129 55 133%ROE 22% 18% 4%Cost to income 62% 75% -12%
6
Impressive profits recorded in H1:13 on the back of strong performance by BancABC Botswana, BancABC Zambia and BancABC Zimbabwe
Aggressive income growth brought cost to income ratio down to 62% from 75%
Financial highlights
BWP’ million Jun-13 % ∆ Jun-12 Dec-12
Total assets
13,738 27%
10,823 13,408 Loans and advances
9,854 26%
7,818 9,144
Deposits
10,940 25%
8,781 10,675
Total equity
1,422 119%
650 1,137
7
Steady year on year growth in both deposits and loans driven by Retail banking with Botswana and Zambia showing impressive growthSix months reduced growth rates in Total assets and Loans reflecting deliberate strategy to “sweat” assets amidst liquidity constrains
8
Operational highlights
3 new branches since December 2012
Total customer numbers up by 15% from December 2012 to 250,000 in June 2013
Total staff complement up by 6% from December 2012 to 1,391 in June 2013
9
DOUG MUNATSI
Economic review
Global Economic Update
Global Economy
The Euro area likely to remain in recession in 2013
The Euro debt crises threatened to derail global recovery for the last two years
Europe
EM expected to continue to outperform developed countries in the medium term
Emerging Markets (EM)
SSA growth strong despite headwinds from global economy
Overarching theme in SSA has been the inability of economic growth to create employment to a sufficient degree
Sub-Saharan Africa (SSA)
Global economic growth to remain flat at 3.1% in 2013 – the same as 2012
10
Global economy: shaken by a crisis & recovery is subject to downside risks
-4
-2
0
2
4
6
8
10
World Advanced Developing Asia MENA SSA
2008 2009 2010 2011 2012 2013 11Source: BancABC own research
Major Risks to Economic Outlook
Global growth – China fails to engineer soft
landing
Emerging markets-
showing signs of slowing down
Oil – geopolitical tensions rise; oil
rallies and threatens global economy
Commodity Prices – Declining prices negatively affect export oriented
economies
Euro Debt Crisis– Escalates beyond current expectations
12
Rapidly Rising Income Levels in China &Other Emerging Markets...
Per capita Income Level Growth in Per Capita Income
US
$
0
100
200
300
400
500
600
700
2000
2003
2006
2009
2012
China
India
Germany
US
Japan
Index: 2000=
100
0
10,000
20,000
30,000
40,000
50,000
China India Japan US Germany
2000 2005 2010 2013
13Source: BancABC own research
Leading SSA Economies by GDP Growth
Sub- Saharan countries among the fastest growing economies in the world
2001 - 2010 2011 – 2013
2001 -
2010
2011-
2015
China8.4
Nigeria6.9
Zambia7.3
Tanzania6.8
Rwanda 7.8
Niger6.5
Angola11.6
Rwanda8.2
India7.4
Nigeria9.0
Ethiopia8.4
Sierra Leone 9.1
China10.5
Uganda7.5
Mozambique8.0
Ethiopia7.0
Mozambique7.7
India5.8
Source: IMF World Economic Outlook, April 2013
Chad9.0
Tanzania7.0
Equat. Guinea17.2
Sierra Leone 14.3
Ghana9.4
Liberia7.9
DRC7.4
14
Inflation Broadly Stable or Receding
J-12
F-1
2
M-1
2
A-1
2
M-1
2
J-12
J-12
A-1
2
S-1
2
O-1
2
N-1
2
D-1
2
J-13
F-1
3
M-1
3
A-1
3
M-1
3
0
4
8
12
16
20
0
4
8
12
16
20
Tanzania
Botswana
Zimbabwe
Mozambique
South Africa
Zambia
15Source: BancABC own research
Exchange Rates Development
Ex. Rates Depreciation vs. USDEx Rates vs. USD
US$/BWP
US$/MZN
US$/TZS
US$/ZMK
US$/ZAR
0 4 8 12 16 20
YTD: Dec-12 to Jun-13
YoY: Jun-12:Jun-13
%
Depreciation
90
95
100
105
110
115
120
125
90
95
100
105
110
115
120
125
US$/BWP
US$/ZAR
US$/MZN
US$/TZS
US$/ZMK
Ind
ex:
Dec-
11=
100
16Source: BancABC own research
Monetary Policy Update
Policy Rates generally lower in line with declining inflation in various countries.
Policy Rates Dec-11%
Current%
Change Since Dec-11
Comment
Botswana ( Bank Rate)
9.5 8.5 -1.00 Lower inflation allowed BoB to reduce Bank rate and to stimulate demand via lower interest rates
Mozambique (Standing Lending Facility)
15.0 9.0 -6.00 Loose monetary policy stance. The SLF lowered several times.
Tanzania (91-dy) 12.6 11.9 -0.74 Declining inflation will result in
lower interest rate cycle
Zambia (BoZ Policy Rate) 9.10 9.75 0.65 Monetary policy tightening in
response to rising inflation.
17
Banking Sector OverviewA
pr-
12
Jun-1
2A
ug-1
2O
ct-1
2D
ec-
12
Feb-1
3
Apr-
12
Jun-1
2A
ug-1
2O
ct-1
2D
ec-
12
Feb-1
3
Apr-
12
Jun-1
2A
ug-1
2O
ct-1
2D
ec-
12
Feb-1
3
Apr-
12
Jun-1
2A
ug-1
2O
ct-1
2D
ec-
12
Feb-1
3
May-1
2Ju
l-12
Sep-1
2N
ov-1
2Ja
n-1
3M
ar-
13
0
2,000
4,000
6,000
8,000
0
2,000
4,000
6,000
8,000
Total Deposits Credit Pvt
US
$m
US
$m
Botswana
LDR 75%
Mozam-bique
LDR 74%
Tanzania
LDR 74%
Zambia
LDR 62%
Zimbabwe
LDR 95%
18Source: BancABC own research
Opportunity to further banking Penetration in BancABC markets
Loan/Deposit Ratio %Banking Penetration (Loan/GDP)
SA
Zimbab
we
Botsw
ana
Moz
ambiq
ue
Tanza
nia
Zambia
0
10
20
30
40
50
60
70
80
2005 2010
2012
Zambia
Moz
ambiq
ue
Botsw
ana
Tanza
nia
Zimbab
we
SA
40
50
60
70
80
90
100
110
66.3
69.973.1 73.1
94.0
104.5
51.8
79.6
53.2
65.7
72.1
99.7
2012
2010
19Source: BancABC own research
20
FRANCIS DZANYA
Operational Overview
21
Operational highlights H1
Tough trading environment characterized by tight liquidity conditions across the group
Improved efficiencies through stable IT environment and enhancements to MIS
Created 83 new jobs across the group- total staff now 1,391
Overall solid performance
22
BancABC Botswana highlights
• NII: 111% higher• Cost to income ratio at
49% (2012: 57%)• Contribution to group
profits at 47%• PAT increased by 127% in
1H13 compared to 1H12 to BWP81,1 million
• Loans: up BWP244m since Dec 12 to BWP3.7bn
• Composition of retail loans increased to 64% from 44%
• NPLs: low at 1.8% • Deposits: at BWP4.8bn
up by BWP554m since Dec 12 and by BWP1.3bn from Jun 12
• Measured growth• Keep pushing in deposit
mobilization and reduction of cost of funding
• Strengthen risk management (credit, liquidity and operational)
Income statement
Jun-13 12-Jun Dec-12Staff complement 257 118 234
Total branches 6 4 6
Total customers
34,978
17,919
28,735
Loans and Deposits Key focus areas
23
BancABC Mozambique highlights
• NII: 24% higher• Non interest income up
14% despite slow down in FX trading income
• Huge impairment charge BWP17.7m. Single client contributed BWP10m
• PAT contribution at 6%
• Loans: up by 17% to BWP1bn from Dec 12
• Deposits up by 21% to BWP1.6bn from Dec 12
• Sluggish growth in retail business
• High NPLs, up from 9% at year end to 12.8%
• Control quality of the loan book
• Selective growth on wholesale banking
• More efforts to be placed on growing the retail loan book and deposits
Jun-13 12-Jun Dec-12Staff complement 188 125 166
Total branches 9 6 8
Total customers
10,712 5,406 8,125
Income statement Loans and Deposits Key focus areas
24
BancABC Tanzania highlights
• Miniscule PAT at BWP591k• Sluggish NII : increase by
12%• Opex accelerated higher
than income generation – business expansion
• Non interest income improved to BWP39m vs BWP2m in 1H12
• Reduction in lending: loans at BWP592m compared to BWP747m in Dec 12
• High NPLs at 20%• Deposits: up BWP33m
since Dec 12 to BWP1.2bn
• Management of cost of funds key
• Balance sheet restructuring taking shape
• Move to new head office will increase visibility
• Seeking business growth in retail banking
• Collecting on NPLs
Jun-13 12-Jun Dec-12Staff complement 151 130 135
Total branches 5 5 5
Total customers
19,836 4,804 5,979
Income statement Loans and Deposits Key focus areas
25
BancABC Zambia highlights
• Impressive growth in operating income: BWP121m against BWP80m recorded in 1H12
• Recoveries on previously written off loans
• Cost to income ratio at 59% (1H12: 72%)
• PAT contribution at 19%
• Loans: up BWP94 since Dec 2012 to BWP1.1bn
• Deposits up to BWP1.0bn from BWP834m in Dec 12
• NPL marginally better at 4.3% from 4.4% at year end
• Continued effort to increase funding base
• Keep momentum in non funded income (trade finance and treasury)
• Overall the performance in 1H13 sets the tone for sustained growth in 2H13
Jun-13 12-Jun Dec-12Staff complement 219 211 211
Total branches
21
21
21
Total customers
87,602 62,541
82,449
Income statement Loans and Deposits Key focus areas
26
BancABC Zimbabwe highlights
• NII: 91% higher• Huge impairment charge:
total charge of BWP57m compared to BWP1.5 m in 1H12
• Contribution to Banking PAT dropped from 45% in 1H12 to 28% in 1H13
• Loans: marginally up BWP133m since Dec 2012 to BWP3.1bn
• Deposits dropped by BWP811m to BWP2.3bn due to tightening liquidity in the market
• NPLs still high at 9%
• Top priority is liquidity and credit risk management
• Measured growth: selective lending
Jun-13 12-Jun Dec-12Staff complement 516 462 506
Total branches 23
19
21
Total customers
97,231
65,891
69,785
Income statement Loans and Deposits Key focus areas
BancABC Botswana# of branches: 6 (+0 in H1:2013) Total staff: 257Total Assets: $564mTotal Deposits: $559mTotal Loans: $425mPAT: $9.783m
Zambia# of branches: 21 (+0 in H1:2013)Total staff: 217Total Assets: $184mTotal Deposits: $ 121mTotal Loans: $131mPAT: $3.968m
Banking operations
Representative office
Tanzania# of branches: 5 (+0 in H1:2013)Total staff:152Total Assets: $108mTotal Deposits: $137mTotal Loans: $69mCombined loss: $3.6m
BancABC Mozambique# of branches: 9 (+1 in H1:2013) Total staff:188Total Assets: $175mTotal Deposits: $190mTotal Loans: $119mPAT:$1.140m
BancABC Zimbabwe# of branches: 23 (+2 in H1:2013)Total staff:516Total Assets: $460mTotal Deposits: $263mTotal Loans: $362mPAT: $8.830m
BancABC (Group)# of branches: 64 (+3 in H1:2013)Total staff:1,391Total Assets: $1,596 mTotal Deposits: $1,271mTotal Loans: $1,145mAttributable profits: $17.2 m
27
Operations As At June 2013 (Convenience conversion in USD)
28
BEKI MOYO
Financial Review
29
Solid earnings…
Jun-11 Jun-12 Jun-13
3756
142.86585987344
17%
18%
22%
Attributable profit (BWP m) ROE (%)
Solid earnings from increased revenues in the retail segment
Negated by huge impairment charge
BWP‘ million 1H13 1H12%
changeNet interest income 476 274 74%Non-interest income 371 235 58%Total revenue 847 509 67%
Credit losses (146) (32) -351%
Operating expenses (529) (379) -40%
Share of associate losses (3) (2) -92%
Profit before tax
169 96 77%Taxation (40) (40) -
Profit for the year
129 56 133%Attributable to: -ordinary shareholders 143 56 157% -minority shareholders (14) - -100%
Basic EPS (thebe) 59.1 37.2 59%Diluted EPS (thebe) 57.3 31.1 84%Dividend per share (thebe) 14.0 8.0 75%
30
Solid earnings…
Solid earnings from increased revenues in the retail segment
Negated by huge impairment charge
Jun-11 Jun-12 Jun-13
6 7
17
17%
18%
22%
Attributable profit (USD m)ROE (%)
USD‘ million 1H13 1H12
% chang
eNet interest income 57 37 56%Non-interest income 45 32 41%Total revenue 102 69 49%Credit losses (18) (4) -303%Operating expenses (64) (52) -25%Share of associate losses (0.3) (0.2) -72%
Profit before tax
20
13 58%Taxation (5) (6) -10%
Profit for the year
15
7 108%Attributable to: -ordinary shareholders 17 7 130% -minority shareholders (2) - -100%
Basic EPS (cents) 7.1 5.0 42%Diluted EPS (cents) 6.9 4.2 65%Dividend per share (cents) 1.7 1.1 57%
31
Financial highlights
Jun-09 Jun-10 Jun-11 Jun-12 Dec-12 Jun-13 -
200
400
600
800
1,000
1,200
1,400
1,600
0.0
1.0
2.0
3.0
4.0
5.0
6.0
505 420 453 650
1,137
1,422 3.45 2.87 3.09
4.35
4.88
5.54
Net Asset Value (BWP m) and NAV per share (BWP)
Net asset value (BWP m) NAV per share (BWP)
BW
P m
BW
P
NAV increased by 25% from year end. NAV per share also increased despite conversion of the IFC debt to equity during the period.
32
Financial highlights
NAV increased by 13% from year end. NAV per share also increased despite conversion of the IFC debt to equity during the period.
Jun-09 Jun-10 Jun-11 Jun-12 Dec-12 Jun-13 -
20
40
60
80
100
120
140
160
180
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
76 65 73
85
146
165
0.52
0.44 0.41
0.57
0.63 0.64
Net Asset Value (USD m) and NAV per share (USD)
Net asset value (USD m) NAV per share (USD)
US
D m
US
D
33
Contribution per entity…
BancABC Bots, 81 , (47%)
BancABC Moz, 9 , (6%)BancABC Tanz, 0.6 , (0%)
Ban-cABC Zam, 33 ,
(19%)
BancABC Zim, 48 , (28%)
BancABC Bots, 36 , (32%)
BancABC Moz, 14 ,
(12%)BancABC Tanz,
(5), (-4%)
BancABC Zam, 17 , (15%)
BancABC Zim, 50 , (45%)
Impressive performance from Botswana, Zambia and ZimbabweMozambique and Tanzania recorded below par performance
30 June 2013 30 June 2012
Attributable profits (BWP’ m)
34
Net interest income on the rise…
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -
100,000
200,000
300,000
400,000
500,000
600,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
Net interest margin
Net int BWP'000 NIM before impairments NIM after impairments
BW
P '0
00
Volumes in the higher margin Retail segment contributed to high net interest income
BancABC Botswana and BancABC Zimbabwe had pronounced growth and had largest contribution. All subsidiaries achieved growth in NII.
High impairments watered down NIM
NII to total costs now at 90% compared to 72% in prior year and 77% for full year 2012
35
Increased impairments in 2013…
2009 2010 2011 2012 2013
51
17 26 32
146
Impairment chargeThree clients contributed 88% of the charge with one each from Mozambique, Tanzania and Zimbabwe.
Quality of the book relatively stable with net NPLs at 4.1% compared to 6.1% at year end but higher than 2.1% recorded for 1H12.
Gross NPLs were 8.7% compared to 9,.2% in Dec 2012 and 5.1% in June 2012
Jun 2009 Jun 2010 Jun 2011 Jun 2012 Dec-12 Jun20130.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
NPL and credit loss ratios
Gross NPL ratio Net NPL ratio Credit loss ratio
NP
L ra
tios
Cre
dit l
oss
ratio
36
Non interest income well balanced…
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13-50
-
50
100
150
200
250
300
350
400
Fees & comms Forex trading Gains on investments FV gains - Inv Prop Other
BW
P 'm
Fees and commissions higher due to increased transactional volumes across all subsidiaries. BancABC Zambia had the largest growth due to increased customer base in consumer lending.
Non interest income was boosted by BWP54m mark to market gain in equity investments
37
Operating expenses high but improved cost to income ratio…
Opex increased in line with continued business expansion
Major increase recorded in employee and infrastructure costs due to increased branch numbers from 55 in 1H12 to 64 in 1H13Cost to income ratio gravitating towards our short to medium term target of 50%
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -
100
200
300
400
500
600
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
169 206
244
379 529
72%
77% 72% 75%62%
Opex Cost to income
BW
P m
%
38
Cost to income ratios per entity
Cost to income ratio dropped in Botswana, Zambia and Zimbabwe
There is some way to go in Mozambique and Tanzania to reach our benchmark of 50%
Botswana Mozambique Tanzania Zambia Zimbabwe0%
20%
40%
60%
80%
100%
120%
57%64%
94%
72%65%
49%
67%
102%
59% 59%
Jun-12 Jun-13
39
Operating costs driven by retail…
Retail banking costs increased by 79% and wholesale costs up by 14%
Zimbabwe and Botswana accounted for combined 52% of opex
Staff complement increased from 1,211 in June 2012 to 1,391 in June 2013
Botswana21%
Mozambique12%
Tanzania11%
Zambia14%
Zimbabwe31%
Head Office10%
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -
100
200
300
400
500
600
Retail Wholesale
BW
P 'm
illio
n
40%
40
Staff complement driven by retail…
Botswana; 257
Mozambique;
188
Tan-zania,
152Zambia, 217
Zimbabwe; 516
ABCH, 61
Staff complement increased by 131 in retail banking division, wholesale banking up by 49 staff. Total staff =1,391.
Numbers increased across all countries with Botswana and Zimbabwe having highest growth
Staff per entity
Jun 2009 Jun 2010 Jun 2011 Jun 2012 Jun 2013 -
200
400
600
800
1,000
1,200
1,400
1,600
511 511 505 546 595
50 101 231
665 796
Staff compliment
Wholesale Retail
41
Operating expenses driven by retail activity…
Retail contributing 51% to opex in 1H13 , up from 39%
in 1H12
Retail increased by 79%; wholesale increased by 14%
High investment in human capital in Botswana and Zimbabwe, contributed to the increase in retail operating costs
Wholesale RetailBWP‘ million Jun-13 Jun-12 Jun-13 Jun-12BancABC Botswana 32 36 81 28 BancABC Mozambique 38 29 28 22 BancABC Tanzania 38 31 19 10 BancABC Zambia 27 17 45 38 BancABC Zimbabwe 78 80 88 44 Banking operations 213 193 261 142 Head office entities 49 37 6 7 Total Opex 262 230 267 149
42
Steady balance sheet growth…
BWP' million Jun-13 % Chg Jun-12 Dec-12Cash and cash equivalents 1,479 50% 989 1,859 Financial assets 1,207 23% 982 1,312 Loans and advances 9,854 26% 7,818 9,144 Property and equipment 854 20% 714 798 Other assets 344 7% 320 295
Total assets 13,738 27%
10,823 13,408 Deposits 10,940 25% 8,781 10,675 Borrowed funds 1,040 -8% 1,131 1,213 Other liabilities 330 35% 245 364 Equity-ordinary shareholders 1,422 119% 650 1,137 Minority interests 6 -65% 16 19
Total liabilities and equity 13,738 27%
10,823 13,408
Steady growth in both loans and deposits
Conversion of IFC debt to equity major contributor to reduction in borrowed funds
43
Steady balance sheet growth…
Steady growth in both loans and deposits
Conversion of IFC debt to equity major contributor to reduction in borrowed funds
USD' million Jun-13 % Chg Jun-12 Dec-12Cash and cash equivalents 172 33% 129 239 Financial assets 140 9% 128 169 Loans and advances 1,145 12% 1,021 1,177 Property and equipment 99 6% 93 103 Other assets 40 -5% 43 38
Total assets 1,596 13%
1,414
1,726 Deposits 1,271 11% 1,147 1,374 Borrowed funds 121 -18% 148 156 Other liabilities 38 20% 32 48 Equity-ordinary shareholders 165 95% 85 146 Minority interests 1 -50% 2 2
Total liabilities and equity 1,596 13%
1,414
1,726
44
Steady growth in loans and deposit...
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -
2,000
4,000
6,000
8,000
10,000
12,000
2,163 2,342
4,019
7,818
9,854
2,925
4,132
6,004
8,781
10,940
Loans Deposits
Loans grew by 26% and deposits grew by 25%
Loans CAGR of 46% and deposits CAGR of 39% over 5 years
45
Loans per entity…
Botswana and Zimbabwe loans contribution at 69%
Impressive loan growth in Zambia
Sluggish loan growth in Tanzania and Mozambique
Botswana, 3,655 ,( 37%)
Mozambique, 1,025 , (10%)
Tanzania, 592 , (6%)
Zambia, 1,128 , (11%)
Zimbabwe, 3,114 , (32%)
ABCH & Other, 341 , (4%)
Loans (BWP’m)
46
Loans driven by Retail banking…
Jun-11 Jun-12 Jun-13 -
2,000
4,000
6,000
8,000
10,000
12,000
3,658
5,343 5,507
4,019
7,818
9,854
2,475
4,347
Retail Wholesale Total Loans
BW
P 'm
illio
n
Retail book
negligible before
June 2011
Retail lending grew by 76% mainly in Botswana, Zambia and Zimbabwe
Retail lending still low in Mozambique and Tanzania
Modest growth in wholesale book; grew by 4% as we prioritized growth in retail book
Retail banking loans contribution up…
Loans and advances Wholesale Retail
BWP‘ million Jun-2013 Jun-2012 Jun-2013 Jun-2012
BancABC Botswana 1,333 1,539 2,322 1,228
BancABC Mozambique 817 716 208 111
BancABC Tanzania 479 587 113 67
BancABC Zambia 363 254 764 518
BancABC Zimbabwe 2,174 1,863 940 587
Banking operations 5,166 4,959 4,347 2,511
Head office entities 341 348 - -
Total 5,507 5,307 4,347 2,511
47
Retail contributing 44%, buoyed by Botswana
Modest growth in wholesale banking at 4%
48
Deposits per entity…
Botswana and Zambia had largest growth
Reduction recorded in Zimbabwe
Botswana, 4,817 , (44%)
Mozambique, 1,635 , (15%)
Tanzania, 1,181 , (11%)
Zambia, 1,042 , (9%)
Zimbabwe, 2,265 , (21%)
Deposits ( BWP’ m)
49
Funding
Demand deposits
28%
Term deposits
54%
Borrowed funds8%
Equity11%
Challenge is to increase the contribution of cheaper demand deposits to enable reduction in cost of funding
Retail drive to mobilise deposits in 2H13 across all entities
50
Deposit growth from wholesale banking…
Wholesale Retail
BWP‘ million Jun-2013 Jun-2012 Jun-2013June-2012
BancABC Botswana 4,292 3,236 525 227
BancABC Mozambique 1,243 1,028 391 267
BancABC Tanzania 1,088 927 93 48
BancABC Zambia 992 585 50 27
BancABC Zimbabwe 2,044 2,219 222 217
Total deposits 9,659 7,995 1,281 786
Wholesale contributing 88%, Botswana highest
Growth in deposits across all subsidiaries
(except Zim)
51
Capital adequacy
Total Capital (BWP 'm) Capital Adequacy RatiosSubsidiary Jun-13 Jun-12 Min Jun-13 Jun-12BancABC Botswana 611 345 15% 17% 15%BancABC Mozambique 288 249 8% 15% 15%BancABC Tanzania 92 150 12% 8% 15%BancABC Zambia 282 196 10% 18% 19%BancABC Zimbabwe 675 421 12% 15% 11%Except Tanzania all operations well within minimum CAR requirements, post reporting period Tanzania now compliant
Zambia minimum capital requirement of US$100m effective 31 December 2013
Zimbabwe minimum capital requirement of US$100m effective 31 December 2014
Plans underway to raise US$150m for capitalisation of all entities and liquidity support
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DOUG MUNATSI
Strategy and Outlook
Organic growth of the current banking operations above 10 per cent market share in all the markets• To be top tier bank in all markets • As a group, to be bigger than the
largest bank in any of our markets;.
Successfully complete rolling out of retail banking operations • Successfully complete the Retail
Banking roll out in Tanzania and Mozambique
• Roll out a network of 100 branches by December 2015 across the group
• Raise retail deposits to self-fund the retail loan book
Become market leader in consumer lending by acquiring fast growing mass market• Roll out recently acquired deductions
code to service government employees
• Roll out group schemes • Test agency model and mobile banking
service mass market
Short to medium term objectives
Immediate Key Funding Objectives• Raise Tier II capital of between US$ 50m and
US$ 100m- WIP• Raise credit lines US$ 200m to US$ 300m-
WIP• Increase capitalization to between US$ 50m
and US$ 100m capital in each market-WIP
Enhance operating efficiency through the development of our human capital• Targeted cost to income ratio of 50 per cent• Manage strategy and monitor performance
through balanced scorecard methodology
Continue to upgrade our IT systems to support our growing business operations for faster execution• On-going review of our IT capabilities and our
business processes to ensure best‑in‑class full corporate and retail banking operation;
• Providing ongoing training that will enable our employees to utilise and support our expanded IT capabilities.
Short to medium term objectives (cont’d)
Outlook
Key success factors in short-term hinge on liquidity and credit risk management
- Plans already in place to diversify sources of funds
- Credit function in the Group has been strengthened
If we achieve success in the above, Group expected to have a stronger 2H12
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Dividend declaration
As per Group Policy, a dividend of 14 thebe (approximately 1.6 US cent) per share to be paid on 13 September 2013 to shareholders on register on 30 August 2013