DOING BUSINESS IN

AFRICA5 NOVEMBER 2019

Standard Bank Group

AGENDA

2

Banking in Africa

Standard Bank Group

Our impact

Looking forward

BANKING IN

AFRICA

AFRICA – OPPORTUNITIES APLENTY

Mineral resources

30% of global reserves of

mineral resources are in Africa

Agriculture

60% of world’s uncultivated

land is in Africa

Population growth

Africa will comprise 40% of the

world’s population by 2050

(2.3 billion people)

Power and Renewable energy

Vast sources of power - hydro,

thermal and solar

Economic growth prospects

A billion people with rising

purchasing power

Young population

In 2034, Africa is expected to have

the world’s largest working-age

population (1.1 billion people)

Mobile penetration

Penetration of smart phones is

expected to hit at least the 50% mark

in 2020 from only 2% in 2010

Projections are Africa’s

consumers will spend $2 trillion

by 2025

4

AFRICA – STRONG GROWTH PROSPECTS

TOP 7 ECONOMIES AVERAGE REAL GDP ANNUAL

GROWTH – STANDARD BANK AR (2018 – 2024)*

2.0

2.0

2.4

5.5

5.7

5.9

6.9

Angola

Namibia

Nigeria

Ghana

Mozambique

Kenya

Uganda

Real GDP annual growth

SSA EXPECTED TO GROW AT AN AVERAGE OF 3.5% BETWEEN 2018 - 2024

AVERAGE EXPECTED REAL GDP ANNUAL GROWTH –

REGIONS (2018 – 2024)*

1.7

1.9

1.4

3.5

Europe

North America

Middle East

Sub-Saharan Africa

Real GDP annual growth

*Source: IMF 2019 5

AFRICA – KEY CHALLENGESA CHALLENGE FOR EVERY OPPORTUNITY

POOR GOVERNANCE – WEAK

INSTITUTIONS / CORRUPTION

SECURITY

MACRO-ECONOMIC

INSTABILITY – GROWING

INDEBTEDNESS

LEADERSHIPUNEMPLOYED YOUTH – LOW

PRODUCTIVITY

LAND REFORM/ SUBSISTENCE

FARMING / CLIMATE CHANGE

UNEMPLOYMENT

DEPENDENCE ON COMMODITIESLACK OF INFRASTRUCTURE

BARRIERS TO MOVEMENT

(GOODS, PEOPLE, CAPITAL)

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Relatively mature markets

Higher GDP per capita and

higher branch penetration

• Egypt

• Mauritius

• Morocco

• South Africa

Sleeping markets

Large markets where banking

penetration is lower than would

be expected at their income

levels

• Algeria

• Angola

• Nigeria

Nascent markets

Both GDP per capita and asset

penetration are still low

• DRC

• Ethopia

• Tanzania

• Uganda

• Zimbabwe

AFRICA – BANKING SECTORFOUR ARCHETYPES*

*Source: IMF; McKinsey Global Banking Pools, 2018 7

Transition markets

Competitive retail banking markets,

with high levels of mobile banking

Growth rate relatively high in these

markets

• Cote d’Ivoire

• Ghana

• Kenya

• Senegal

• Zambia

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AFRICA – BANKING OPERATING ENVIRONMENTLONG WAY TO GO IN TERMS OF DEPTH, BREATH AND SOPHISTICATION

Digitisation

Regulatory

Environment

Competition

Skills and

Expertise

Localisation pressure

Financial inclusion

Increased regulatory attention

and focus on recovery and

resolution planning in many

jurisdictions

Skills shortages driving a war

on talent

Skills required changing

Competition from local &

foreign financial services

organisation

New entrants into the industry

(telco’s, start-ups etc.)

The current and future impact

of robotic evolution

Speed and quality of delivery of

technologically-based solutions

Cloud hosting

GROUPSTANDARD BANK

AN UNRIVALLED AFRICAN FRANCHISE

STANDARD BANK GROUP

10

BANKING MARKET SHARES, BY ASSETS

STANDARD BANK GROUP – AFRICA REGIONS

55

35

27 2522

18 18 16

8 6 5

Leso

tho

Esw

atini

Ma

law

i

Na

mib

ia

Uganda

Bo

tsw

ana

Zim

bab

we

Zam

bia

Gh

an

a

Ke

nya

Nig

eria

% market share

BESPOKE AND COUNTRY-RELEVANT STRATEGIES

Well positioned to deliver a universal financial service organisation

Investment in infrastructure largely complete

Clearly defined areas of focus at country level leveraging off Group expertise and legitimacy where required

Contributing positively to group ROE and earnings growth

11

STANDARD BANK GROUP – AFRICA REGIONS

RETURN ON EQUITY, %

DELIVERING GROWTH AND RETURNS

HEADLINE EARNINGS, Rbn

1.9

2.4

3.7

4.9

5.55.7

6.7

8.0

2011 2012 2013 2014 2015 2016 2017 2018

~23%

CAGR

8.4

10.1

11.9

21.5 20.9 20.6

23.8 24.0

2011 2012 2013 2014 2015 2016 2017 2018

Group mid-term ROE target

18 – 20%

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STANDARD BANK GROUP – AFRICA REGIONS TOP 3 RISKS AND THEIR EFFECT ON STRATEGY

Threatens client experience and shareholder value

CYBER

Client experience, as a strategic imperative, is directly

influenced by effectiveness of technology in providing

relevant, innovative, secure and stable digital service

offerings

TECHNOLOGY

Requirement to comply with the highest possible standards

of responsible business practice. Need to balance driving

digitization against regulatory concerns on data privacy and

cloud computing

REGULATORY

13

STANDARD BANK GROUP – AFRICA REGIONSKEY OPERATING CHALLENGES IN MANAGING THE BUSINESS

EXCHANGE RATES

MOVEMENT OF PEOPLE

INFLATION RISK

ENDOWNMENT RATESCOMMODITY PRICE

RECOVERY

CORRESPONDENT BANKING

US-CHINA TRADE WAR

TELCO’S AND FINTECHS

ELECTRICITY SUPPLY

NEW REGULATIONS

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FOREIGN CURRENCY

LIQUIDITY

STANDARD BANK GROUP – AFRICA REGIONS KEY OPPORTUNITIES WITHIN THE BUSINESS

WAEMU REGION

AfCFTA

ETHIOPIA

WEALTH BUSINESS

FINTECH COLLABORATION

AFRICA CHINA CORRIDOR

15

IMPACTOUR

OUR COMMITMENT – RESPONSIBLE BANKING

17

FOUNDING SIGNATORY TO THE PRINCIPLES OF RESPONSIBLE BANKING

PRINCIPLES FOR

RESPONSIBLE BANKING

OUR COMMITMENT – DRIVING AFRICA’S GROWTH

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DOING THE RIGHT BUSINESS, THE RIGHT WAY

Our SEE impact, underpinned by the Sustainable Development Goals

EDUCATION &

SKILLS

DEVELOPMENT

CLIMATE CHANGE

&

ENVIRONMENTAL

SUSTAINABILITY

HEALTH

FINANCIAL

INCLUSION

JOB CREATION

& ENTERPRISE

DEVELOPMENT

AFRICA TRADE

& INVESTMENTINFRASTRUCTURE

DELIVERING IMPACT THROUGH COLLABORATIONS

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A mobile application which

provides access to new lines

of business, credit and

savings services for millions of

informal merchants across the

continent

Design, build and scale

disruptive technology start-up

across the continent to create

jobs and attract new capital. 140

disruptive tech-enabled

businesses across the continent

by 2021

A new breed of African

innovators harnessing mobile

money, along with advances

in solar power and battery

storage, to leapfrog the

continent’s gaps in electric

power generation

BEING MORE THAN A BANK

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FORWARDLOOKING

Sub-Saharan Africa, an opportunity for growth

− Economic prospects

− Banking sector penetration

Standard Bank’s role on the continent

− Balancing the need to reduce inequality and poverty

with other stakeholder demands

− 7 SEE* impact areas

SBG Africa Regions’ role

− Deliver on all 3 group key strategic focus areas

− Continue to be a key driver of Standard Bank

Group’s growth and ROE

Signatory to Principles of Responsible Banking

HeForShe champion

SBG AFRICA REGIONS – LOOKING FORWARD

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*SEE – social, environmental and economic

▪ Thank You

▪ Je vous remercie

▪ Obrigado

▪ Ngiyabonga

▪ Asante

▪ Me daa si

DOING BUSINESS IN

AFRICA5 NOVEMBER 2019

Standard Bank Group