equity bank presentation
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TRANSCRIPT
1
British Council Leadership Forum 2008
Innovative Strategy – The Case of Equity Bank Ltd
20th August 2008
Dr. James Mwangi, MBSCEO and Managing Director, Equity Bank
2
Agenda
Equity before innovation
Innovative strategy
Equity after innovative strategy (1994-2008)
3
Equity Before Innovation1986-1993
4
CUSTOMERS DEPOSITSfigures in KSH Millions
24 24 22 2322 25
32 31
86 87 88 89 90 91 92 93
5
LOANS & ADVANCESfigures in KSH Millions
76
78
9 910
12
86 87 88 89 90 91 92 93
6
PROFITS AND LOSSfigures in KSH Millions
-5
-4 -4 -4
-3
-4
-6-5
86 87 88 89 90 91 92 93
7
ACCUMULATED REVENUEfigures in KSH Millions
-5
-9-13
-17-20 -22
-28-33
86 87 88 89 90 91 92 93
8
INVESTMENT CAPITALfigures in KSH Millions
1 1
3 3 3 3 3 3
86 87 88 89 90 91 92 93
9
OLD KIRIAINI BRANCH
10
INSIDE LOOK OF OLD KIRIAINI BRANCH
11
OLD KANGEMA BRANCH
12
CBK RATING AS AT 31ST DECEMBER 1993
OVERALL : Institution technically insolventASSESSMENT
MANAGEMENT: Poor Governance
ASSET QUALITY: Quality unsatisfactory, poor non-performing loans 54%
CAPITAL ADEQUACY: Capital fully eroded by accumulated losses.
13
CBK RATING AS AT 31ST DECEMBER 1993
EARNINGS & PROFITABILITY:Society threatened to grind to a haltDeposits utilized to meet operating expensesReturn to profitability threatened by need for provision for bad & doubtful debts
LIQUIDITY:Liquidity of -5.8% compared to minimum legal requirement of 20%Deposits base volatile & unstable
14
Innovation Strategy
Turn round strategyUnderstanding the rebirth of Equity Building Society by Prof. Gerhard Coetze
Vision and Mission drift
People touch/service led transformation
15
Funding Strategy
Founder member clients/shareholdersESOPStrategic Investor (AfriCap)Private PlacementStrategic Investor – Helios???
16
Business Strategy
Bottom of the pyramidLow margin/high volumeMarket led (Product & Service)Service driven
17
Brand Strategy
Brand Essence – DNADignityTouch-Humility/respect/friendliness/flexibilityReaching for the soul
18
Brand Evolution
MicrofinanceInclusive FinanceConvenienceBest Bank Award• Banking Survey/Think Business• Euromoney• Global Vision Award
19
Biggest Bank• Customer Base• Capital Base• Market Capitalization• Branch network• Delivery Channels/ATM’s• Profitability?
Brand Evolution cont…..
20
Technology Strategy
Processor
Enabler
Efficiency base
21
Growth Strategy
Growth/Profitability/Control
22
People Strategy
Higher purpose rewardShared vision/missionESOPCompensationEngagement/Maslow’s hierarchy of needs
23
Diversification Strategy
MicrofinanceRetail BankingCorporateBancassuranceCustodial Regional Expansion
24
Risk Management/Mitigation Strategy
Mass MarketInsulated to macro-factors (inflation/exchange, growth)Whole EconomyRisk Based processes/procedures/policies
25
Governance EvolutionFounder shareholdersFounder leadershipAfriCap – IFC/EIBHelios – IFC/OPIC/CDCSeven pillar strategy- Seven Critical Success Factors- Seven departments- Seven Executive Directors- Seven Board Committees- Board of 9
26
Organizational Evolution Strategy
Building Society 1984-1993Microfinance 1994-2004Commercial Bank 2005Public listed company 2006Global/Regional Organization 2008
2727
Equity after deployment of innovative strategy
2828
Growth Number of Deposit Clients
Home of 45% of all bank account holders in Kenya
2929
Growth in Volume Customer Deposits
978 1,500 2,1913,368
5,081
9,047
16,336
31,536
43,004
Mill
ion
s
3030
Growth in Borrowing Clients
Home of 42% of all bank account holders in Kenya
3131
Growth in Loan Portfolio
450 860 1,189 1,7343,099
5,885
11,428
22,228
36,841
Mill
ion
s
3232
Growth in Profit
KES 547
35 55 111 142218
501
1,103
2,379
3,087
2000 2001 2002 2003 2004 2005 2006 2007 Jun'08
Mill
ion
s
3333
Total Assets
KES 547
1,260 1,881 2,576 3,924 6,707
11,456
20,024
53,129
72,484
Mill
ion
s
3434
Share Holders Funds
KES 547
195
227 324 4781,271 1,594
2,201
14,917
18,341
Mill
ion
s
3535
Growth in Staff
117 165 210 354 585
884
1,395
2,418
3,679
3636
Alternate Delivery ChannelsEazzy Banking/Mobile SMS Banking
The mobile phone as a delivery channel is a revolutionary way ofbranchless banking making basic financial services more accessible to millions of Kenyans across the country:
Airtime top-upBalance enquiryTransfers to nominated accounts (within Equity Bank)Bill paymentsInternet BankingEquity Cash back services-Shop, Pay & withdraw cash at selected storesPoints of saleRetail Outlets agency networkEquity MoneyLine – Money transfer
3737
(insert the SMS banking poster)
3838
Village Mobile Banking
Taking banking services to the peopleVillage mobile banks (rural focus)
3939
ACHIEVEMENTS
4040
EUROMONEY 2008 Awards for Excellence
“The Best Bank award for Excellence from Euromoney with its unrivalled track record is the most prestigious accolade a financial institution can
receive in the world.”
Equity Bank Voted Best Kenyan Bank for two consecutive years 2007 & 2008
41
East Africa’s first banking super-brand
4242
Kenya Bank Survey 2008
Rating Best Bank Overall-2008
Equity improved its ranking to emerge the Best Bank in 2008
Contributing Factors
Solid Capital
Growing Customer base
Good Management
4343
Microfinance Rating-2007
Equity Ranked Best Microfinance institution in
Africa & 3rd Best in the world
Benchmarked analysis conducted amongst leading microfinance institutions globally by Microcapital
The candid voice for microfinance investment
4444
Global Credit Rating-2007Rating Short-term: A
Long-term: A+
Equity’s performance for the YTD has been positive. The YTD performance is due to sustained growth in banks operating base, leading to higher volumes, and a continued shift to higher yielding assets. The bank has also realised from economies of scale from its investment in delivery channels.
Contributing Factors High Quality Management & Strategic Management
Good Profitability
Strong Deposit growth
4545
Bank Awards 2007 Bank Survey
Best Retail Bank, Best Micro-Finance Bank, Fastest Growing Bank, 2nd Best Bank Overall, Runners up Product Innovation & SME Bank
4646
Company Of the Year Award
Equity Bank winner of Corporate Planning Management Award COYA 2006
COYA… a celebration of management excellence
4747
MicroRate Rating-July 2005
Rating α-(alpha minus)
Interpretation Good efficiency and effectiveness. Low risk/well managed, and minimally effected by variability during economic cycles. Good future prospects
Contributing Factors
Good governance and strategic positioning
Excellent management and staff
Good Profitability
Competitive loan and savings products
4848
Planet Finance of France Rating 2001
GIRAFE Rating
Assessment Score
Governance & Decision Making
B INTERPRETATION: - A High Global Performer.- Applying Advanced Professionalism.- Technically self – sufficient.- Low Risk Investment.- Investment Grade.
ACHIEVEMENT:The best rating ever granted under the GIRAFE Methodology
Worldwide for a period of two years. 2000/2001
Information & Management
A
Risks Analysis and Control
B
Activities & Loan Portfolio
B
Funding: Equity & Liabilities
A
Efficiency & Profitability
B
Overall rating G4 *
4949
CORPORATE SOCIALRESPONSIBLITY
5050
Agriculture Shows of Kenya
Equity Bank won the 1st Best Bank Stand in ASK 2007 Eldoret , Kisumu, Mombasa, Garissa
5151
Outreach Programme
Community Service Programme-KU & Equity
5252
Best crop husbandry trophy award scheme to the best tea farmer
5353
Free mass public financial literacy education and training
5454
Education Minister, Prof. Sam Ongeri (in red tie) with the 2008 Pre-University Programme beneficiaries. To his immediate right his Higher Education Asst. Minister, Dr. Kilemi Mwiria, Education Asst. Minister, Prof. Ayiecho Olweny. To his left is Equity Bank Chairman, Peter Munga, CEO, Dr. James Mwangi, Board member, Dr. Julius Kipng’etich and Education Secretary, Prof. Gordia.
Pre-university employment program
5555
NATIONAL AWARDS
5656
Elder of the Burning Spear (EBS)- 2006Head of State Commendation (HSC)-2004
To Equity Chairman-P.K Munga
5757
Moran of the Burning Spear (MBS)-2006Head of State Commendation (HSC)-2004
To Equity CEO-James Mwangi
5858
Compliance & Contribution to the Economy
Equity among largest top taxpayers
5959
Kenya Bankers Association Trophy of Excellence held by Equity for being the institution with highest number
of qualified bankers 2004-2007
6060
CEO Equity Bank honoured by JomoKenyatta University of Agriculture & Technology with Doctorate in Entrepreneurship ( Honoris Causa), Kenyatta University as Doctor of Humane Letters (Honoris Causa) and Kenya Methodist University with Doctorate in Business Administration (Honoris Causa)
6161
INTERNATIONAL RECOGNITION
6262
2007 Global Vision Award on Microfinance
“Initiators of the Concepts of the Future that will shape
the World Economy”
6363
CEO Equity Bank Appointed in 2008 into the presidency of Global Economic Network to represent Africa
6464
CEO Equity Bank appointed advisor to the United Nations Environmental Programme on Commercialization of Microfinance in Africa.
6565
CEO Equity Bank Appointed to the UN Advisors Group on Inclusive Financial Sectors from April 2006
6666
H.E. Rt. Hon. Don McKinnon Commonwealth Secretary General and Hon. Henry Obwocha Minister for Planning and National Development during the launch of Internet Banking and ATM Auto-branches.
6767
“IMPROVING ACCESSIBILITY THROUGH IT INNOVATIONS VIA MOBILE BANKING”
CEO appointed a member of the panel of 8 advisors to Bill & Melinda Gates Foundation on Microfinance
6868
Case study in the leading International Business Schools
- Harvard- Stanford- IESE- Strathmore-Tsinghua
6969
Equity Bank Limited
Board of Directors
7070
Peter Munga-EBSChairman
CPS, A Retired Deputy Secretary. Chairman MESPT, Member of Board of Directors of British American Insurance Co. , Rockefeller Foundation, NOCK, Equatorial Nut Processors.
7171
Dr. James Mwangi-MBS
CEO & M.D
Doctorate in Business Administration, Doctorate of Humane Letters, Doctorate in Entrepreneurship, B-Com-Accounting, CPA (K)
Graduate of AMP-Strathmore-IEESE Business School SpainAn experienced career banker.
Previously With Ernest & Young and Trade Bank
7272
Dr. Julius K. Kipngetich-EBS
MBA-Strategic Planning, B-Com-AccountingChief Executive – Kenya Wildlife Services
7373
Benson Wairegi
MBA, B-com - Insurance, CPA (K)Group Managing Director, British American (Kenya)
Director Agricultural Finance Corporation
7474
TEMITOPE O. LAWANI
MBA, BS - Chemical Engineering. Co-founder Helios EB Investment, Board member -First City Monument Bank PLC, Africatel Holdings B.V.,
Corporate Development Analyst at Walt Disney Co and member of the Harvard Law School Dean's advisory Board.
7575
BABATUNDE SOYOYE
MBA, B.Eng - Electrical Engineering. Co-founder, Helios EB Investment, Board member- Africatel Holdings B.V., and
Manager of Business Development at Singapore Telcom International.
7676
Peter Gachuba
MSC International Business, BSC Partner Southern and East African region -
AfriCap
7777
Wagane Diouf
MBA, Bsc – Computer Science & FinanceManaging Partner, AFRICAP.
7878
Ernest K. Nzovu
BA-Economics, Dip. International AffairsDirector and Consultant-Know How International Ltd
-Hawkins & Associates -KHI Training
7979
Fredrick Muchoki
MD-Continental Business Systems and Presta Office Equipment Limited.
8080
Linus W. Gitahi
MBA, B-Com-AccountingManaging Director & CEO – Nation Media Group
8181
Secretary to the Board
LLB, CPS (K), Advocate of the High Court, Post Graduate Diploma in Gender and Development. Graduate of
AMP-Strathmore-IEESE Business School Spain
Mary Wangari Wamae
8282
Senior Management Team
8383
Dr. James Mwangi-MBS
CEO & M.D
Doctorate in Business Administration, Doctorate of Humane Letters, Doctorate in Entrepreneurship, B-Com-Accounting, CPA (K)
Graduate of AMP-Strathmore-IEESE Business School SpainAn experienced career banker.
Previously With Ernest & Young and Trade Bank
8484
Gerald G Warui
Operations & Customer Service Director CPA(K), Graduate of AMP-Strathmore-IEESE Business School Spain.
Over 13 years bank experience.
8585
Change & Corporate Affairs DirectorB.A. Admin, Bsc. Industrial Psychology, Post Graduate Diploma.
Previously Head of HR with Reckit and Colman, SmithKline Beecham, Safaricom Kenya, and Kenya Petroleum Refineries.
Winnie Kathurima Imanyara
8686
Finance DirectorM.B.A: Masters in Business & Administration, CPA (K)
Previously with Standard Chartered Bank as Head of Finance Systems & Processes, Africa region, Head of Finance, shared services centre, (East & Southern Africa region) and Finance Director in Tanzania &
Botswana
John K Njoroge
8787
Director - Strategy ,Legal Services and Company Secretary
LLB, CPS (K), Advocate of the High Court, Post Graduate Diploma in Gender and Development. Graduate of
AMP-Strathmore-IEESE Business School Spain
Mary Wangari Wamae
8888
Marketing & Product Development Director
B.Pharm. Post Graduate Dip. Marketing (CIM)
Previously Marketing Director West & East Africa, Glaxo SmithKlineGSK
Henry Karugu
8989
Corporate Banking Director
Associate of the Chartered Institute of Bankers (London) and a career banker with over 20 years experience. Previously worked with Citibank N.A., ABN Amro Bank N.V., Standard Chartered Bank Kenya Limited, Stanbic Bank Kenya Limited, and NIC Bank Limited.
Peter Makau
9090
Director – Projects BIT, MCSE, CNE
Graduate of AMP-Strathmore-IEESE Business School SpainHas over 15 Years Experience previously with Daima Bank and
Phoenix of East Africa Assurance Company
Allan M Waititu
9191
General Manager- Community AffairsPreviously with Murang’a Cooperative Union and Continental Bank.
Over 30 years banking experience.
Ben Nyutho
9292
General Manager - Information TechnologyBed. Science. Diploma in Computer Science
Previously with ABC & ABN & Amro Banks. Computer Application Limited (Symphony)
Peter G. Gachau
9393
General Manager - CreditMBA, Bed, CPA (K), CPS(K), CISA
Graduate of AMP-Strathmore-IEESE Business School SpainPreviously with the
Central Bank of Kenya and Coca-Cola Africa.
Mbaabu Muchiri
9494
General Manager - Alternate Business ChannelsB.Sc, CISA, CISM, Postgraduate Diploma in Computer Science.
Over 20 years Experience, former Director of ICT and Operations CRDB Bank, Tanzania and Senior Manager IT at
Central Bank of Kenya and Standard Chartered
Samuel G Kamiti
9595
L’parnoi Lengewa
Head of Leadership & Organizational Development
MBA, B.A Economics & Business StudiesHe has over 12 years experience in human resource development,
having previously worked with leading microfinance institutions in East Africa and with the Swedish Cooperative Centre.
9696
Head of CommunicationsBA Hons. Dip-Mass Communication
Previously worked with World Scouts Movement as Communication Director for Africa.
Lydiah W. Kiburu
9797
Head of FinanceB.Com, MBA, CPA (K)
Previously worked with ABN AMRO Bank, Lonrho Africa Plc and Deloitte & Touché.
Allan Kabiru
9898
Head of Internal AuditB.Com Accounting, CPA (K)
Previously with Central Bank of Kenya (CBK) and British American Insurance Company (BRITAK)
Bildard Fwamba
9999
Head of Business RelationshipsBSc. Mathematics, MIBA in Finance Dip-Banking. Over 15
years banking experience. Previously worked with ABC Bank and Investments & Mortgages Bank.
Apollo N. Njoroge
100100
Head of Security and Administration
Advanced Diploma and Certifications in Security Intelligence from Israel, Trained in U.S.A. and the UK.
.
Major (Rtd) Marcus Mutua
101101
Head of InsuranceB.Com, Insurance. Associate of the Chartered Insurance
Institute, UKPreviously worked with Aon Minet Insurance Brokers
Winnie W.Mbugua
102102
Head of Risk ManagementB Com (Accounting Option)
Previously Central Bank of Kenya
Papius Muhindi
103103
Senior Credit ManagerACIB
Over Previously Regional Manager Barclays Bank
John Ayuko
104104
Head of TreasuryBA-Hons, Post Graduate Diploma-Finance (UK).ACCAPreviously worked with Citibank NA, & KCB Kenya &
Tanzania.
Anthony W. Nyuguto
105105
Our InspirationThat when years turn our vision dim and gray, we shall still be seeing beauty in the tired wrinkles of our faces and shall take comfort out of the fact and knowledge that when we were given the opportunity we did all we could to empower our people to exploit opportunities and realise their full potential on the road to economic prosperity.
