investor briefing & q1 2016 performance - equity …...investor briefing & q1 2016...

Investor Briefing &

Q1 2016 Performance

April 2016

2

1. Macro-economic overview

2. Governance & leadership structure

3. Regional expansion and diversification

4. Digital bank

5. SME strategy

6. Qualitative analysis

7. Performance of core business (intermediation)

8. Financial performance

Presentation Outline

3




4. Digital bank

5. SME strategy





4

The Kenya Shilling has appreciated by 1.0% on a YTD basis against the USD

Stability in the foreign exchange market continues to be supported by an improved forex reserves currently at USD 7.6

billion (equivalent to 4.96 months of import cover) and a narrowing current account deficit largely due to the following:

- A lower import bill for petroleum products

- Recovery in tourism, tea and horticulture exports

- Slowdown in consumer imports

- Strong diaspora remittances.

4

Foreign Exchange Rate - Kenya

106.0

105.0

104.0

103.0

102.0

0.0

Apr ’16

101.1 +1%

Mar ’16

101.3

Feb ’16

101.7

Jan ’16

102.3

105.3

Aug ’15

103.9

Sep ’15

101.8

Oct ’15

102.1

Nov ’15

102.3

Dec ’15Jul ’15

102.5

USD / KES

5

USD vs. USH,TSH, RWF, KSH

KES vs East African Currencies

33.033.333.034.0

33.032.9

35.035.035.2

21.721.621.521.421.121.221.420.520.620.6

7.47.57.37.37.37.37.37.07.06.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

33.3

Oct ’15Sep ’15Aug ’15 Apr ’16

+9%

+5%

-1%

KES / RWF

KES / TSHS

KES / USHS

Mar ’16Feb ’16Jan ’16Dec ’15Nov ’15Jul ’15

5

The Kenya Shilling maintained stability against the regional currencies in 2016

20162015

6

FX reserves have risen to five months of import cover giving a significant cushion to the shilling

Reserves currently stand at $7.62 billion amounting to 4.96 months of import cover.

Key reasons for increase in reserves are:

i. Lower oil prices

ii. Falling current account deficit (currently 8.2% of GDP)

iii. Increased exports and inflow from tourism

6

FX Reserves - Kenya

5.0

4.5

4.0

0.0

Q1 14

4.34.3

Apr-16

5.0

Q1 16

4.6

Q4 15

4.3

Q3 15

4.1

Q2 15

4.4

Q1 15

4.7

Q4 14

4.6

Q3 14

4.3

Q2 14

Desired Minimum

Months of Import Cover

7

Current Account balance as a % of GDP - Kenya

-8.2-8.2-8.4

-5.9

-8.9

-11

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

2010 2011 2012 2013 2014 2015 2016

-10.4

-9.1

In Percent

8

Inflation - Kenya

The latest inflation figure as at end of April was 5.3% (down from 6.45% in March) due to

- Food prices (food index is down due to the rains)

- Low fuel prices

0

2

4

6

8

10

Dec-15 Jan-16 Feb-16 Apr-16Mar-16

5.3%

6.5%6.8%7.8%8.0%

9

Interest Rates

Political and Economic review in the region

91 Days T. Bill

182 Days T. Bill

364 Days T. Bill

Interbank rate

11.33% 11.51% 18.61% 21.35% 22.13% 9.21% 10.41% 11.76% 9.32% 8.41% 8.77%

12.89% 18.81% 19.84% 25.84% 14.87% 8.77% 5.19% 6.13% 4.51% 4.09% 4.05%

12.15% 12.36% 14.55% 21.61% 22.29% 10.09% 12.34% 14.18% 11.93% 10.66% 10.69%

12.53% 13.82% 16.30% 21.50% 22.36% 11.93% 12.75% 14.92% 13.25% 11.91% 11.80%

Jul Aug SepSep-Oct

Peak Oct Nov Dec Jan Feb

2015 2016

Mar

Due to the high liquidity in the market, interest rates have been dropping since the beginning of February

On March 21st 2016, the MPC met and retained the CBR Rate at 11.5% (keeping it at the same level for the

last 9 months)

The MPC had earlier also retained the KBRR at 9.87% (on Jan 20th 2016)

Apr

1010

Kenya’s Resilient Economy

Kenya’s GDP growth rate maintained an upward growth rate with an increasing momentum while Africa is

experiencing declining growth rate.

Kenya’s Gross Domestic Product (GDP) is estimated to have expanded by 5.6% in 2015 which was a slight

improvement compared to a 5.3% growth in 2014.

Kenya’s GDP growth rate is projected to rise to 5.9% in 2016 and 6.1 % in 2017 predicated on infrastructure

investments. Fiscal consolidation is expected to ease pressure on domestic interest rates and increase credit

uptake by the private sector. The contraction in the current account deficit will continue to be supported by

declining commodity prices and rising exports of tea.

5.65.35.7

4.6

6.1

2013 201520142011 2012

1111

Economic growth drivers

Kenya Tourism showing positive signs of recovery with enhanced security with Kenya registering the highest

growth of 27% in Hotel Bookings For The Period May To July In Africa. Government incentive on reduction of

park entry fees from $90 to $60 and More chartered airlines from Europe to Mombasa, have boosted the

sector.

Kenya recorded the fastest rise in foreign direct investments (FDI) in Africa and the Middle East, at 47%. A total

of 84 projects worth Sh102 billion from real estate, renewable and geothermal energy as well as roads and

railways provide a huge chunk of new jobs for Kenyans. Kenya was ranked 3rd in terms of numbers of projects

initiated after the United Arab Emirates (UAE) at 298 and South Africa at 118.

Kenya’s Agriculture Experiencing Renewed Growth As A Result Of Improved Weather And Rainfall Pattern.

According to the KNBS economic Survey , Agriculture value added rose from 3.5% in 2014 to 5.6% in 2015.

Total value of marketed production at current prices increased by 11.3% from KSh 333.2 billion in 2014 to KSh

371.0 billion in 2015. Total earnings from crop sales increased by 15.5% to KSh 271.8 billion in 2015.

12

Macro-economic Indicators – East Africa

12

13

Macro-Economic Indicators Summary (East Africa)

182 Days T-Bills

364 Days T-Bills

Central Bank Rate

91 Days T-Bill

Uganda Rwanda Tanzania

16.28% 6.21% 17.67% 5.4%

15.56% 5.89% 9.02% 4.7%

16.19% 8.35% 18.81% 8.1%

16.0% 12.0% 12.0% 6.5%

Inflation 6.2% 5.8% 5.4% 4.5%

DRC

14




4. Digital bank

5. SME strategy





15

Strong Governance & Leadership Structure

Equity Bank

Rwanda

Equity Bank

Tanzania

Equity Bank

Uganda

Equity DRC

(Pro Credit Bank)

Equity Bank

Kenya

Chief Officer,

Finance,

Innovation,

Payments

CEO’s office

Group Director,

Payments

Subsidiary Boards

Each subsidiary with own Board of Directors compliant with local regulations

Consulting

Infrastructure

Services

Subsidiary Boards

Director

Brand,

Culture and

HR

Equity Bank

South Sudan

Chief Technology &

Information Officer

Group Director,

Treasury

Group Director,

Special Projects

Group Director,

Analytics

Group Director,

Finance

Group Director

Strategic Relations

&Partnerships

Risk and

Compliance Officer

Group Director,

Corporate Banking

Group Director,

SME Banking

Group Chief

Operating Officer

Director

Governance,

Strategy, Legal,

Company Secretary

CEO

Group Board

Shareholders

Non-Banking

Subsidiaries

Corporate

Office

2

CBK CMA NSE Rating Agencies

Banking

Subsidiaries*

Equity Group

Foundation

Equity

Investment Bank

Equity Insurance

Agency

Equity Group

Holdings Limited

Board

Committees

Board

Committees

Subsidiary

Internal AuditGroup Internal

Auditor

Group Board

Committee

Subsidiary

Internal Audit

16




4. Digital bank

5. SME strategy





17

KES “Billion”

Tanzania Rwanda Uganda S. Sudan

Deposits

Loan

Deposits Growth

Loan Growth

Assets

Asset Growth

PBT

PBT Growth

Regional

Total

12.8

1%

15.4

37%

21.0

21%

0.08

-12%

10.5

23%

8.6

21%

13.9

19%

0.06

-50%

12.5

21%

7.0

-1%

17.0

12%

0.09

2%

10.5

-61%

0.4

-89%

14.4

-57%

0.02

-95%

67.0

14%

45.5

56%

95.0

23%

0.32

-45%

Regional Expansion – Key Metrics for Banking Subsidiaries3

Regional

Contribution

Q1 2016

22%

17%

21%

5%

Regional

Contribution

Q1 2015

21%

13%

20%

10%

DRC

20.7

14.2

28.8

0.07

31%

71%

49%

-41%

18

Regional Subsidiaries – Size and Contribution(Assets and PBT contribution by countries)

3

4.0% 3.8%

3.0% 3.1%

S. Sudan

Kenya

Rwanda

Tanzania

DRC

3.2%

Uganda

100.0%

Q1 2016

78.7%

4.7%

6.4%8.6%

100.0%

Q1 2015

79.8%

4.6%

0.0%

Total Assets split by Country PBT split by Country

1.1%1.4%

1.2%

1.5%1.5%

1.9%0.8%

90.5%

100.0%

0.0%

4.7%

Q1 2015

0.2%

100.0%

95.1%

Q1 2016

DRC

Kenya

S. Sudan

Tanzania

Rwanda

Uganda

19

Net Interest Margin

Percentage

Kenya

12.8

11.411.110.9

Q1 ’16Q4 ’15Q3 ’15Q2 ’15

11.5

9.710.5

9.7

Q1 ’16Q4 ’15Q3 ’15Q2 ’15

Uganda

4.55.2

4.74.7

Q1 ’16Q4 ’15Q3 ’15Q2 ’15

Tanzania

11.8

14.1

15.615.1

Q4 ’15 Q1 ’16Q3 ’15Q2 ’15

DRC

Rwanda

7.9

9.38.89.1

Q3 ’15Q2 ’15 Q4 ’15 Q1 ’16

South Sudan

-0.1

3.5

2.12.6

Q1 ’16Q4 ’15Q3 ’15Q2 ’15

3

20




4. Digital bank

5. SME strategy





21

Execution on Digital Banking

(Increased number of Transaction numbers & values)

Transaction numbers in millions+26%

Q1

2016

14.7

Q1

2015

11.6-15%

Q1

2016

6.6

Q1

2015

7.8

+45%

Q1

2016

2.2

Q1

2015

1.5

+315%

Q1

2016

45.6

Q1

2015

11.0

4

Transaction value in KES billion+37%

Q1

2016

102.1

Q1

2015

74.5

+43%

Q1

2016

11.1

Q1

2015

7.7

+562%

Q1

2016

62.4

Q1

2015

9.4

-6%

Q1

2016

47.8

Q1

2015

51.0

EquitelMerchantsATMAgency Branch

Q1

2016

-15%

Q1

2015

6.55.5

-10%

Q1

2016

335.1

Q1

2015

372.6

22

Execution on Digital Banking (Transaction numbers trend)

4

5.5

6.4

6.7

6.96.6

8.38.5

14.7

11.6

80

15

10

5

0

8.0

6.8

Q1 2013

6.6

Q1 2012

3.7

Q1 2016

79.5

Q1 2015

7.87.8

Q1 2014

8.3

Transactions (Millions)

Agency

ATM

Branch

Mobile

Cash related transactions only

23

Execution on Digital Banking(Equitel customer numbers up 180% growth YoY)

4

250

750

1,250

1,000

1,500

500

1,750

2,0002,000

0

250

500

750

1,000

1,250

1,500

1,750

0

Sep

2015

1,369

1,500

Oct

2015

1,591

1,861

Feb

2016

Mar

2016

Dec

2015

1,760

Jan

2016

1,665

+180%

Nov

2015

1,178

Aug

2015

1,166

Jul

2015

1,085

Jun

2015

1,024

May

2015

902

Apr

2015

788

Mar

2015

666

Linkage to M-Banking SIM uptake

85%

81%

83%

87%85%

KES “000”

86%87%

88%

89%

89%

90%

90%

90%

24

Execution on Digital Banking(Mobile Customer Transaction Numbers & Value Trend)

4

160

20

40

60

80

100

120

140

180

0

20

40

60

80

100

120

140

160

180

0

200

200

220

Feb

2016

152.1

Mar

2016

177.3

196.6

Jan

2016

181.3

131.9

165.9

Dec

2015

114.9

151.0

Nov

2015

96.9

132.4

Oct

2015

82.5

118.2

Sep

2015

69.5

105.4

Aug

2015

58.8

94.9

Jul

2015

49.5

85.4

Jun

2015

42.3

77.7

May

2015

33.0

63.2

Apr

2015

24.4

48.6

Mar

2015

17.2

35.8

Cumulative M-Banking Transactions numbers (millions)

Cumulative M-Banking Value (KES billions)

25

Execution on Digital Banking(Count of loan disbursements through Mobile vs. Branch)

4

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

1,608

(77%)

Oct

2015

1,770

450

(25%)

1,320

(75%)

Sep

2015

1,503

416

(28%)

1,087

(72%)

Aug

2015

1,284

382

(30%)

902

(70%)

Jul

2015

1,068

350

(33%)

718

(67%)

Jun

2015

944

321

(34%)

623

(66%)

May

2015

814

290

(36%)

524

(64%)

493

(23%)

Jan

2016

Feb

2016

Dec

2015

2,455

533

(22%)

1,922

(78%)

Nov

2015

2,101

601

(20%)

2,456

(80%)

3,381

631

(19%)

2,749

(81%)

Apr

2015

688

258

(37%)

430

(63%)

Mar

2015

578

225

(39%)

353

(61%)

2,744

Mar

2016

569

(21%)

2,176

(79%)

3,057

BranchMobileCombined

In Thousands

Cumulative

26

Execution on Digital Banking(KES 14.1 billion Disbursed through Mobile Channel)

4

14.1

11.8

10.0

8.5

6.9

5.6

4.6

3.8

2.92.4

1.91.61.3

Mar

2016

Nov

2015

Oct

2015

Sep

2015

Jul

2015

Jun

2015

May

2015

Apr

2015

Mar

2015

Aug

2015

+1,012%

Dec

2015

Jan

2016

Feb

2016

Loan Value Disbursement (KES "Billion")Disbursement Count (number)

353,052

Cumulative figures

2,749,290

27


(Loan Outstanding Trend)4

In Billions

2.51

2.01

1.82

1.541.46

1.02

0.850.82

0.510.470.41

0.300.28

Jan

2016

+797%

Dec

2015

Nov

2015

Oct

2015

Sep

2015

Aug

2015

Jul

2015

Jun

2015

May

2015

Feb

2016

Mar

2016

Apr

2015

Mar

2015

28


(Loan Repayment Trend)4

29

Focus on Variable

cost model…

Continuous Growth in Agency Banking4

▪ Number of

agents

increased to

25,388 agents.

31% growth

y/y

… More transactions now processed under 3rd party infrastructure saving

on fixed costs

▪ More

transactions

now

processed

under 3rd

party

infrastructure

▪ Agent

transactions

registered a

26.2%

growth 5.5

6.4

6.87.16.6

7.88.38.58.4

14.7

3.7

0

5

10

15

+26.2%

Q1 2016Q1 2015

11.6

Q1 2014

8.3

8.0

Q1 2013

6.66.7

Q1 2012

6.9

Q1 2011

0.2

Transactions (Millions)

Agency

ATM

Branch

30

Number and Value of Agents Transactions 2011 - 20164

57

9 912

14 1416 16

1719 19

22

25 26 27

31

3436

3

5.2

4.5

4.24.1

3.5

3.0

2.52.6

2.2

1.9

1.51.4

0.7

0.4

0.1

3.1

2.2

1.0

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

32

34

36

38

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Mar

2016

Dec

2015

Sept

2015

Sept

2014

Jun

2014

Mar

2014

Dec

2013

Sept

2013

Jun

2013

Mar

2013

Dec

2012

Sept

2012

Jun

2012

Mar

2012

Dec

2011

Sept

2011

4.7

2.5

Jun

2011

Mar

2011

1

3.7

Jun

2015

Mar

2015

Dec

2014

Transactions in million Value in billion kes

31

Number of Merchants Outlets 2011 - 20164

8,0637,749

6,864

6,153

5,618

5,166

4,412

3,7203,499

3,0662,824

2,668

2,3462,1392,018

1,6581,519

1,1941,0651,034 1,083

Sept

2015

Dec

2015

Mar

2016

Jun

2013

Mar

2013

Dec

2012

Sept

2012

Jun

2012

Mar

2012

Sept

2013

Dec

2013

Dec

2011

Sept

2011

Jun

2011

Mar

2011

+679.8%

Jun

2014

Mar

2014

Sept

2014

Dec

2014

Mar

2015

Jun

2015

32

Merchants Turnover and Revenue 2011 - 20166

0.5 0.5 0.60.8 0.8 0.8 1.0

1.31.1

1.3 1.2

1.61.8 1.8

2.1

3.2

2.72.9

3.3

4.4

3.9

8888

6664

70

3836

2623

29

181617

12119

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

10

20

30

40

50

60

70

80

90

Dec

2015

Sept

2015

44

Sept

2014

Jun

2014

Mar

2014

Dec

2013

Sept

2013

Jun

2013

Mar

2013

Dec

2012Sept

2012

Jun

2012

Mar

2012

Dec

2011

Sept

2011

53

25

Jun

2011

Mar

2011Mar

2016

63

20

Jun

2015

Mar

2015

Dec

2014

Revenue in million kes

Turnover in billion kes

33

We are building on our momentum in Payment Processing and

Merchants…4

We have partnered with key payment

companies…

…which has allowed us to grow our number of transactions

and commissions

▪ Equity is leading in Acquiring and

Issuing

▪ Best in class payment channel

services work well with merchants

+43%

+43%

+59%

+54%

Q1 2016

259

Q1 2015

181

7,735

Q1 2014

117

4,854

11,057

Merchant CommissionsMerchant Transaction Volumes

Volume (Millions)Commissions (Millions)

http://www.dinersclub.com/index.html

http://www.dinersclub.com/index.html

34




4. Digital bank

5. SME strategy





35

SME contribution to the Loan Book and CASA5

6.6%5.9%

22.7%

2.8% 2.6%

Q1 2015

100.0%

18.0%

49.8%

19.9%

Large

Enterprises

Agriculture

SME

Micro

Consumer

Q1 2016

100.0%

16.5%

55.1%

Loan book split by type Deposit base split by type

Current

Accounts

Savings

Term

Deposits

Q1 2016

100.0%

35.6%

42.7%

21.7%

Q1 2015

100.0%

35.9%

43.0%

21.1%

36

Growing Non-funded Income as a result of cross-selling to SME’s5

Highlights

▪ Non Funded Income: Dropped by 7% YoY mainly due drop in to FX income and Commissions on Loans

▪ Funded Income: Interest Income grew by 37% YoY due to growth in loan book and improving NIMs

Funded

Non-

Funded

Q1 2016

15.6

10.4

(67%)

5.2

(33%)

Q1 2015

13.2bn

7.6

(58%)

5.6

(42%)

Q1 2014

11.1bn

7.0bn

(63%)

4.1bn

(37%)

Q1 2013

10.2bn

6.9bn

(67%)

3.3bn

(33%)

Q1 2012

9.0bn

5.7

(63%)

3.3bn

(37%)

Non Funded Income by Type

Fees &

Commission

Foreign

Exchange

Other

Income

Q1 2016

68.0%

16.2%

15.9%

Q1 2015

66.2%

20.5%

13.3%

37




4. Digital bank

5. SME strategy





38

Equity has earned recognition in 2015

Equity’s International Rankings

Equity’s Global Credit Rating

Equity BankOverall Soundness Performance

(Capital Assets Ratio) (Profits on capital) (Return on assets)

2015 Global Rank 916 88 18 8

2014 Global Rank 999 112 8 4

6

39

Equity Group’s stock excites Globally

STOCK Beta Yield (%) ROaE

Yield per unit of Risk

(Yield/Beta)

KCB 1.44 4.68% 25.0% 3.25%

EGHL 1.28 4.88% 25.5% 3.81%

COOP 1.18 4.10% 25.2% 3.47%

Reuters: Equity Group Holding yielding a higher return at a lower risk

Financial Times: Equity Group Holding to outperform the market in 2016

6

40

Equity Bank – Most valuable lender listed at the NSE6

41

Equity has earned substantial accolades in 2016

Equity Bank: Winner Best Bank in Kenya6

Overall Winner Best Bank in Kenya (2016, 2015, 2014 East Africa, 2013, 2012, 2009)

Winner Best Bank Tier 1 (2016, 2015, 2014 East Africa, 2013, 2012 )

42


Equity Bank: Winner Best Bank in SME Banking6

Best Bank in SME Banking (2016, 2015)

43


Equity Bank: Winner Best Bank in Retail Banking6

Best Bank in Retail Banking (2016, 2015)

44


Equity Bank: Winner Best Bank in Agency Banking6

Best Bank in Agency Banking (2016, 2015)

45


Equity Bank: Winner Best Bank in Micro-Finance6

Best Bank in Micro-Finance (2016, 2015, 2012, 2011, 2010, 2009)

46


Equity Bank: 1st Runner Up Best Bank in Customer

Satisfaction6

(1st Runner up 2016, 2nd Runner up 2015)

47


Equity Bank: 2016 Other Awards6

48


Equity Bank: 2016 Other Awards6

49




4. Digital bank

5. SME strategy





50

76%

13%

102%

8%

Growth per Class

Funding Base

(Significant improvement in funding profile)

15.5%

Deposits

Shareholders’ Funds

Borrowed Funds

Other Liabilities

Q1 2016

430.2

300.3

(70%)

69.1

(16%)

46.0

(11%)

14.7

(3%)

Q1 2015

372.5

278.2

(75%)

60.9

(16%)

26.2

(7%)

7.3

(2%)

In KES “Billion” 15.5% growth in funding with deposits accounting for 70%

7

51

Deposits by Entity & Type

3.6%

4.0%9.6%

3.4%

3.0% 3.3%Rwanda

Q1 2016

Uganda

S. Sudan

DRC

Tanzania

Kenya

100.0%

78.5%

100.0%

79.3%

Q1 2015

6.7%

4.1%

0.0%4.5%

Deposit split by Entity

21.1%

35.9%

43.0%

Current

Accounts

Savings

Term

Deposits

Q1 2016Q1 2015

100.0%

42.7%

21.7%

100.0%

35.6%

Deposit split by Type

7

52

48.3

(11.2%)

275.0

(63.9%)

Q1 2015

372.536.9

(9.9%)48.9

(13.1%)

+15.5%

Government Securities

Other Assets

62.0

(16.6%)

224.8

(60.3%)

Cash & Cash Equivalents

Net Loans

Q1 2016

430.2

44.5

(10.3%)

62.4

(14.5%)

-22%

28%

21%

22%

Growth per Asset Class

15.5% growth in asset base while still maintaining portfolio diversification

Assets of KSH 430 Billion driven by stable Deposit base

In KES billion

7

53

Loan book by Segment and Entity

3.1%3.1%

3.1%

2.5%2.0%

Kenya

Tanzania

DRC

Rwanda

Uganda

S. Sudan

Q1 2016

100.0%

83.4%

5.6%

5.2%

0.2%

Q1 2015

100.0%

86.9%

4.9%

0.0%

Split across the entities within the GroupSplit across Segments

49.8% 55.1%

6.6%5.9%

22.7%19.9%

Large Enterprises

SME

Micro

Consumer

Agriculture

Q1 2016

100.0%

16.5%

2.6%

Q1 2015

100.0%

18.0%

2.8%

7

54

Increasing Net Interest Margin5

Cost of funds

Percentage

Net Interest MarginYield on interest Earning Assets

11.7

10.510.2

9.89.9

Q1 ’16Q4 ’15Q3 ’15Q2 ’15Q1 ’15

2.83.02.52.52.6

Q1 ’16Q4 ’15Q3 ’15Q2 ’15Q1 ’15

14.513.5

12.712.312.5

Q1 16Q4 15Q3 15Q2 15Q1 15

55

3.5%

2.9%

4.1%4.1%3.9%

3.8%

3.3%

4.5%4.4%4.3%

Q1 2016Q4 2015Q3 2015Q2 2015Q1 2015

GroupEBKL

Stable NPL Trend over time7

56

56.0%60.6%

65.0%62.5%63.2%

84.0%

92.8%88.7%

86.2%87.0%

Q1 2016Q4 2015Q3 2015Q2 2015Q1 2015

(Gen. Prov. + Spec. Prov. + Int. Susp) / Gross NPL

(Spec. Prov. + Int. Susp) / Gross NPL

Non-Performing Loans: High Coverage Levels7

57




4. Digital bank

5. SME strategy





58

Funding Distribution

Q1 2016

Broad base liabilities & funding sources

Q1 2015 Q1 2016 Growth Y/Y

Liabilities & Capital (Bn) KSH KSH %

Deposits 278.2 300.3 8%

Borrowed Funds 26.2 46.0 76%

Other Liabilities 7.3 14.7 102%

Shareholders’ Funds 60.9 69.1 13%

Total Liabilities & Capital 372.5 430.2 15%

Q1 2015

Borrowed Funds 7%


16%

Other Liabilities

Deposits

2%

75%

Other Liabilities

Deposits

11%

3%

70%

Borrowed Funds

16%


8

59

Asset Distribution

Q1 2016Q1 2015

Asset Portfolio & Distribution

Q1 2015 Q1 2016 Growth Y/Y

Assets (Bn) KSH KSH %

Net Loans 224.8 275.0 22%

Cash & Cash Equivalents 62.0 48.3 -22%

Government Securities 48.9 62.4 28%

Other Assets 36.9 44.5 21%

Total Assets 372.5 430.2 15%

60%Net Loans

13%



Other Assets

17%

10% 10%



Other Assets

15%

11%64%

Net Loans

8

60

KES (Billion) Q1 2015 Q1 2016 Growth

Interest Income 9.5 12.9 36%

Interest Expense (1.9) (2.4) 32%

Net Interest Income 7.6 10.4 37%

Non-Funded Income 5.6 5.2 -7%

Total Income 13.2 15.7 18%

Loan Loss Provision (0.3) (0.7) 104%

Staff Costs (2.5) (3.0) 21%

Other Operating Expenses (4.3) (4.7) 8%

Total Costs (7.1) (8.4) 17%

PBT 6.1 7.3 19%

Tax (1.8) (2.2) 19%

PAT 4.3 5.1 20%

Delivering 20% growth in PAT8

61

Positive Financial Ratios

Kenya Kenya Group Group

Q1 2015 Q1 2016 Q1 2015 Q1 2016

Profitability

NIM 10.9% 12.8% 9.9% 11.7%

Cost to Income Ratio (with provisions) 50% 46% 54% 53%

Cost to Income Ratio (without provision) 48% 43% 51% 49%

RoAE 35.9% 37.4% 27.6% 29.1%

RoAA 5.2% 5.4% 4.8% 4.8%

Asset Quality

Cost of Risk 0.46% 0.67% 0.63% 1.03%

Liquidity / Leverage

Loans / Deposits 86.5% 94.0% 80.8% 91.6%

Loans / (Deposits + Borrowed Funds) 77.8% 79.8% 73.8% 79.4%

Loans / (Deposits + Borrowing Funds + S/H Funds) 66.1% 67.5% 61.5% 66.2%

Liquidity 32.9% 29.4% 39.3% 34.9%

Capital Adequacy Ratios

Core Capital to Risk Weighted Assets 14.7% 14.8% 16.2% 18.3%

Total Capital to Risk Weighted Assets 16.8% 16.1% 18.2% 19.6%

Core Capital to Deposits Ratio 18.5% 20.5% 18.8% 24.2%

Customer Numbers

No. of Customers 8,274,425 8,971,514 9,547,596 10,313,468

8

62

Cost to Income Ratio Trend

▪ Total Operating Income up 18% y/y mainly attributed to improved NIM

▪ Operating expenses up 17% y/y

51.2%48.7%49.5%50.9%

48.9%47.8%45.4%46.5%47.8%

43.3%

Q1 2012 Q1 2013 Q1 2015Q1 2014 Q1 2016

Group Bank

8

63

37.4%

33.9%33.0%35.0%35.9%

29.1%

25.5%25.3%26.6%27.6%

Q1 ’16Q4 ’15Q3 ’15Q2 ’15Q1 ’15

Group

EBKL

RoAE

5.4%5.2%5.0%5.1%5.2%4.8%

4.5%4.3%4.6%4.8%

Q1 ’16Q4 ’15Q3 ’15Q2 ’15Q1 ’15

Group

EBKL

RoAA

RoAA and RoAE overtime8

64

THANK YOUDr James Mwangi, CBSGroup Managing Director & CEO

KeEquityBank

@KeEquityBank

Email: [email protected]

Web site: www.equitybankgroup.com

mailto:[email protected]

http://www.equitybankgroup.com/

investor briefing & q1 2016 performance - equity …...investor briefing & q1 2016...

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