Half Year Financial Results
2012
14 August 2012
Agenda
● Highlights
● Economic overview
● Operational overview
● Financial review
● Strategy and outlook
Highlights
DOUGLAS MUNATSI
BancABC Half Year Financial Results 2012
Financial Highlights
in BWP
Attributable
Profits
Dividend Per
Share
NAV Per Share
June 2012 June 2011
∆
55.6m
37.2m
+49%
0.08
0.068
+18%
4.35
3.09
+41%
Trend
Group performance is satisfactory setting the group well for the rest of the year
BancABC Half Year Financial Results 2012
Financial Highlights
June 2012 June 2011
PAT
BWP55.3m
17.8%
ROE
Cost To Income 75%
37.2 thebe
EPS
∆
BWP39.1m
+ 41%
17.0%
+ 0.8%
72%
+3.0%
25.9 thebe
+44%
Trend
Profitability improved on the back of increased business volumes across all lines of
business. Expansion into Consumer Lending bearing fruits in Botswana, Zambia
and Zimbabwe. Cost to income still high
BancABC Half Year Financial Results 2012
Financial Highlights
in BWP
June 2012
10.8 billion
Total Assets
Loans & Advances 7.8 billion
8.8 billion
Deposits
Equity
636 million
June 2011
∆
7.4 billion
+47%
4.0 billion
+95%
6.0 billion
+46%
453 million
+43%
Trend
Group total assets have increased steadily mainly in Botswana, Zimbabwe and to
lesser extent Zambia. Group total loans grew faster than deposits essentially
fuelled by Botswana’s book which has grown over 200%
BancABC Half Year Financial Results 2012
Operational highlights
Total retail branches
increased from 35 in June
2011 to 55 in June 2012
Total retail customer
numbers increased by 144%
from 63,891 in June 2011 to
155,763 in June 2012
NPLs at 5.4% from 5.5% in
June 2011, credit loss ratio
down from 1.2% in 2011 to
0.8% in 2012
Raised US $50 million by
way of a rights issue in July
2012
BancABC Half Year Financial Results 2012
7
Economic review
DOUG MUNATSI
BancABC Half Year Financial Results 2012
Economic overview
Global
economy is set
to grow by
3.5% in 2012
compared to
3.9% in 2011
Weak Global
recovery
depends on
progress in
Europe and
United States
BancABC Half Year Financial Results 2012
Growth
momentum has
also slowed in
various
emerging
market
economies Brazil, China
and India
Emerging
markets have
been hit by
investor risk
aversion &
growth
uncertainty
9
Economic overview (cont’d)
Just like
temperature
in Europe,
the financial
crisis is
heating up
once more
Euro area
periphery
economies at
the
epicentre of
escalation in
financial
crisis
BancABC Half Year Financial Results 2012
Investors
are
increasingly
unsatisfied
with the
steps taken
to tackle
the euro
crisis
Euro area is
expected to
enter into a
mild
recession
in 2012
US
economic
activity
less
robust
10
Economic overview (cont’d)
Sub-Saharan Africa
(SSA) is not immune
to the spillover
effects of euro zone
crisis
SSA economic growth
expected to be 5.4%
in 2012
Many SSA countries
have embarked on
policy easing to
support economic
growth
BancABC Half Year Financial Results 2012
11
Fiscal & debt levels in selected countries
250
Gvt Debt, % of GDP
Japan
200
Greece
150
USA
Ireland
UK
Italy
Portugal
100
France
Spain
Germany
Brazil
India
50
Russia
China
0
-14
-12
-10
-8
-6
-4
-2
Fiscal Balance, % of GDP
0
2
Negative fiscal Balance means budget deficit
BancABC Half Year Financial Results 2012
12
20
Inflation
18.7
Avg Inflation
%
Inflation development - H112
18
16
14
12
10
7.9
6.0
6.4
4.1
Mozambique
Tanzania
Zambia
Zimbabwe
6
4
2.7
Botswana
8
SA
2
0
Though declining, inflation remains very high in Tanzania: Highest TZ inflation rate was 19.8 % in
December of 2011 and record low was 3.4 % in February of 2003,
Countries have benefited from lower oil prices
Food inflation has been broadly stable but expected to pick in H2:2012
BancABC Half Year Financial Results 2012
13
35
%
Policy interest rates
Policy interest rates – key monetary
policy tools to fight inflation
30
Bots Bank rate remained flat at 9.5%
25
20
Moz (Standing Lending
Facility)
15
10
5
Bots (Bank Rate)
Zambia (Bank
Rate)
0
BancABC Half Year Financial Results 2012
Moz policy rate was lowered from 15%
in Feb-12 to 13.5% in Jun in line with
declining inflation
In TZ, firming up of overnight rate in
H2:2011 was due to tight liquidity
conditions
In ZM, bank rate averaged 9% in
H1:2012 compared to 7.7% H1:2011
14
Interest rates landscape – H112
Country
Avg. TB Avg. Prime
Yield Rate
Lending
Rates
Avg.
Deposit
Rates
Avg.
Spread
Botswana
Mozambique
5.0
11.0
5.9
5.1
7.1
18.9
13.2
5.7
Tanzania
13.2
13.9
9.9
4.0
Zambia
7.0
22.6
7.0
15.6
Zimbabwe
---
10 - 30
0.15 - 18
9.85-12
BancABC Half Year Financial Results 2012
15
Exchange rate movement vs. USD
On annual basis the
following currencies
depreciated vs. USD:
6.5
ZMK
ZAR: 22.6%
-1.3
TZS
YoY: Jun-11 to Jun-12
MZN appreciated vs.
USD by 2.7%
22.6
ZAR
ZAR volatility linked
to Euro zone crisis
18.4
BWP
-4
0
ZMK : 6.5%
TZS :1.3%
-2.7
MZN
BWP: 18.4%
4
8
BancABC Half Year Financial Results 2012
12
16
20
%
ZAR weakness pulling
down BWP
16
ZAR correlation to Euro
9.0
0.90
Correlation between
Euro & ZAR is ≈ 0.6
US$/ZAR
8.5
US$/Euro
0.85
8.0
0.75
7.5
0.70
7.0
0.65
Suggesting that ≈ 60%
of US$/ZAR movement
is explained by
US$/Euro movement
Has implications for
regional trade
0.60
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
6.5
US$/Euro
US$/ZAR
0.80
BancABC Half Year Financial Results 2012
17
Exchange rate movement per Pula
BWP/ZMK
750
250
730
BWP/TZS
240
Jun-12
Dec-11
Apr-12
200
Feb-12
650
Oct-11
210
Aug-11
670
Jun-11
220
Apr-11
690
Feb-11
230
Dec-10
710
All other ABC currencies appreciated against
the BWP
BWP/MZN
5.50
5.00
4.50
ZAR hardest hit emerging market currencies
by risk aversion
4.00
3.50
BancABC Half Year Financial Results 2012
Jun-12
Apr-12
Feb-12
Dec-11
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
3.00
ZMK strength propped up by policies to dedollarize economy
18
Deposits per capita (US$)
LDR, %
110
100
Zimbabwe
276
90
South Africa
6,637
Mozambique
203
80
kenya
371
70
Tanzania
160
Botswana
3,103
60
Zambia
283
50
0
5
10
BancABC Half Year Financial Results 2012
15
20
25
#of Banks
30
35
40
45
50
19
Minimum capital requirements
180
Nigeria
142
Algeria
Zimbabwe
100*
Zambia (Foreign Banks)
100*
39
SA (Commercial Banks)
20
Zambia (Local Banks)
Kenya
11
Uganda
10
Ethiopia
10
Tanzania
10
Steep Capital
Requirements
for Banks in
Zambia &
Zimbabwe
8
SA (Mutual Banks)
Malawi
5
Angola
4
0
US$ m
20
40
60
80
100
120
140
160
BancABC Half Year Financial Results 2012 * For new applications. Full compliance date for existing banks:
Dec 2012 in Zambia and June 2014 in Zimbabwe
180
200
20
GDP Size (US$ bn)
Minimum Cap & No. Banks
220
Nigeria
273
200
GDP Size (US$ bn)
= Bubble Size
180
Minimum Capital, US$m
160
Algeria
207
140
120
Zimbabwe
11
100
Zambia
21
80
60
Botswana
18
40
South Africa
420
Mozambique
15
20
Kenya
42
Angola
122
0
Tanzania
25
-20
5
10
15
20
25
30
35
40
45
Number of Banks
BancABC Half Year Financial Results 2012
21
ABC Markets – Banking Sector Landscape
(US$m)
7,000
7,000
Total Deposits
Credit Pvt
6,000
6,000
5,000
4,000
4,000
3,000
3,000
2,000
2,000
US$m
US$m
5,000
Mozambique
Botswana
Tanzania
Zimbabwe
Zambia
1,000
1,000
LDR=65%
LDR=74%
LDR=74%
LDR=56%
LDR=90%
BancABC Half Year Financial Results 2012
Jun-12
Apr-12
Feb-12
Dec-11
May-12
Mar-12
Jan-12
Jun-12
Apr-12
Feb-12
Dec-11
May-12
Mar-12
Jan-12
Jun-12
Apr-12
Feb-12
0
Dec-11
0
22
Operational Overview
FRANCIS DZANYA
BancABC Half Year Financial Results 2012
BancABC Botswana Highlights
Another
Good Run
Revenue
• NII: +203%
• Balance sheet
growth
• Good margins
from consumer
lending book
• Non Interest
Income:
+64%
• Higher FX
trading income
BancABC Half Year Financial Results 2012
•Ops Stats
• Staff: up from 187 (Dec-11) to 211
• Branches: 4
• Customers: up from 9,177 (Dec-11)
to 17,919
Loans and
Deposits
•Loans:
+BWP1.1bn to
BWP2.8bn
•Impairments:
up from
BWP2m to
BWP15m
•Deposits: +
BWP0.9bn to
BWP3.5bn
Outlook
• Consumer
lending and
group scheme
loans
• 100% home
loans, Visa
prepaid cards
• Chips and PIN
cards, ATMs
rolled out,
VISA acquiring
24
BancABC Mozambique Highlights
Satisfactory
Revenue
• NII: +127%
• Balance sheet
growth
• Improved
margins amidst
tough
competition
• Non Interest
Income: +32%
• Increased FX
trading income
and trade
finance fees
BancABC Half Year Financial Results 2012
•Ops Stats
• Staff: up from 125(Dec-11) to 144
• Branches: 6
• Customers: up from 4,516 (Dec11) to 5,406
Loans and
Deposits
• Loans:
+BWP65m to
BWP827m
• Impairments:
up from BWP3m
to BWP10m
• Gross NPLs
increased from
4.3% to 7.4%
• Deposits: +
BWP79m to
BWP1.3bn
Outlook
• Visa prepaid
cards
• Campaigns on
deposit
mobilization
• IFC SME
Program
• Market interest
rates on a
gradual
downward trend
25
BancABC Tanzania Highlights
Below
Budget
Revenue
• NII: -38%
• Shrinking interest
margins
• Non Interest
Income: - 12%
• Lower bond
trading volumes
BancABC Half Year Financial Results 2012
•Ops Stats
• Staff: up from 101(Dec-11) to 130
• Branches: +1 during H1:12, total to 5
• Business volumes still a major
constraint on Retail and SME
Loans and
Deposits
• Loans: +BWP82m
to BWP654m
• 13% reduction in
Impairment
charges
• Some NPL
accounts still
being regularized
• Deposits: BWP86m to
BWP975m
Outlook
• Consumer
Lending, acquired
Payroll deduction
in July
• Card based
products
• Market interest
rates slowly
trending
downwards
26
BancABC Zambia Highlights
Good
above
budget
Revenue
• Total income up
78% from
BWP45m to
BWP80m
• Growth in
consumer loans
• Increased trade
finance
transactions
BancABC Half Year Financial Results 2012
•Ops Stats
• Staff: up from 187(Dec-11) to 211
• Branches: +2 during H1:12, total 21
• Customers: up from 52,515 to 62,541
Loans and
Deposits
• Loans:
+BWP195m to
BWP772m
• growth mostly
on consumer
lending book
• NPLs: down
from 11.6% in
Jun-11 to 4.5%
in Jun-12
• Deposits:+
BWP65m to
BWP613m
Outlook
• Consumer
lending sales
campaigns
• Rollout of card
products
27
BancABC Zimbabwe Highlights
Robust
Performance
Revenue
• NII: 45% higher
• Balance sheet
growth
• Non Interest
Income: up
77% from
increased
customer
transactions
BancABC Half Year Financial Results 2012
•Ops Stats
• Staff: up from 352 (Dec-11) to 462
• Branches: +3 during H1:12 total to
19
• Customers: up from 52,515 to 65,891
Loans and
Deposits
• Loans:
+BWP416m to
BWP2.4bn
• Significant
collections from
delinquent
accounts
• NPLs: up from
2.74% in Jun-11
to 5.2% in Jun12
• Deposits:+
BWP448m to
BWP2.4bn
Outlook
• Banc Easy,
• Group loan
schemes,
• Mortgage loans
and VAF,
• SMS banking
launched,
• Internet/POS
acquiring and
VISA prepaid
card at
advanced stage
28
Financial review
BEKI MOYO
BancABC Half Year Financial Results 2012
Income Statement
BWP'000
Jun-12
%∆
Jun-11
Net interest income
273,670
43%
191,354
Impairment of loans
(32,408)
-26%
(25,821)
241,262
46%
165,533
234,947
61%
145,678
Total income
476,209
53%
311,211
Operating expenses
(379,016)
-55%
(244,026)
Net income from operations
97,193
45%
67,185
Share of loss of associates
(1,472)
68%
(4,546)
Profit before tax
95,721
53%
62,639
Tax
(40,441)
-72%
(23,529)
Profit for the year
55,280
41%
39,110
55,579
49%
37,242
(299)
-116%
1,868
37.2
44%
25.9
8.0
18%
6.8
NII after impairment of loans
Non-interest income
Performance driven by
increase in net interest
income and non-interest
income – expansion into
Consumer Lending
Impairments higher due to
loan growth and
downgrade in Tanzania &
Mozambique
Attributable to:
-Ordinary shareholders
-Minority interests
Basic EPS (thebe)
Dividend per share (thebe)
BancABC Half Year Financial Results 2012
Operating expenses higher
in line with expansion
30
Income Statement
USD'000
Jun-12
%∆
Jun-11
Net interest income
36,909
27%
29,172
Impairment of loans
(4,371)
-11%
(3,936)
NII after impairment of loans
32,538
29%
25,236
31,686
43%
22,208
Total income
64,224
35%
47,444
Operating expenses
(51,116)
-37%
(37,201)
Net income from operations
13,108
28%
10,243
(198)
71%
(693)
Profit before tax
12,910
35%
9,550
Tax
(5,454)
-52%
(3,587)
Profit for the year
7,456
25%
5,963
7,497
32%
5,678
(41)
-114%
285
Basic EPS (US cents)
5.0
28%
3.9
Dividends per share (US cents)
1.0
0%
1.0
Non-interest income
Share of loss of associates
Performance driven by
increase in net interest
income and non-interest
income – expansion into
retail space
Impairments higher due to
loan growth and downgrade
in Tanzania & Mozambique
Attributable to:
-Ordinary shareholders
-Minority interests
BancABC Half Year Financial Results 2012
Operating expenses higher
in line with expansion
31
Attributable Profit Trend
Higher attributable profits
driven by increase in core
earnings
Upward trend in past 3
years supported by
sustainable earnings
ROE only marginally higher
– loss in Tanzania impacted
earnings
Dip in 2009 due to
dollarization & change in
business model
BancABC Half Year Financial Results 2012
32
Income Statement- Segmental Analysis
Attributable profits
BWP'000
Jun-12
% Cont
Jun-11
% Cont
%∆
Botswana
35,727
32%
10,883
15%
228%
Mozambique
13,816
12%
7,823
11%
77%
Tanzania
(4,860)
-4%
9,941
14%
-149%
Zambia
16,991
15%
6,200
8%
174%
Zimbabwe
49,809
45%
38,422
52%
30%
111,483
100%
73,269
100%
52%
Banking Operations
Head office & consolidation
adjustments
(55,904)
(36,027)
-55%
Total
55,579
37,242
49%
Significant growth in
Botswana and Zambia
– consumer loans
BancABC Half Year Financial Results 2012
Zimbabwe continued
growing profitability
from all business
segments
Tanzania performance
impacted by lower
interest margins and
higher impairments
33
Income Statement – Segmental Analysis
Total income by entity
BWP'000
Jun-12
Jun-11
%∆
Dec-11
109,330
48,460
126%
116,482
BancABC Mozambique
70,343
43,171
63%
120,660
BancABC Tanzania
33,643
45,376
-26%
55,639
BancABC Zambia
80,329
45,248
78%
100,902
BancABC Zimbabwe
190,361
112,478
69%
218,943
Banking Operations
Head office entities
484,006
294,733
64%
612,626
(7,797)
16,478
-147%
46,183
Total
476,209
311,211
53%
658,809
BancABC Botswana
Strong growth in income other than Tanzania and head office entities
BancABC Half Year Financial Results 2012
34
Income Statement – Segmental Analysis
Total income by business and subsidiary
BWP'000
Jun-12
Jun-11
Wholesale Wholesale
Jun-12
Retail
Jun-11
Retail
BancABC Botswana
53,564
46,003
55,766
2,457
BancABC Mozambique
62,809
39,843
7,534
3,328
BancABC Tanzania
29,980
43,860
3,663
1,516
BancABC Zambia
23,821
8,708*
56,508
36,540*
BancABC Zimbabwe
143,129
88,029
47,232
24,449
Banking Operations
Head office entities
313,303
226,443*
170,703
68,290*
(7,797)
16,478
-
-
Total
305,506
242,921*
170,703
68,290*
26% growth in Wholesale banking income mainly
due to Botswana, Mozambique and Zimbabwe.
Wholesale contribution down from 78% in Jun-11
to 64% in Jun-12.
150% growth in Retail banking income mainly due
to Botswana, Zambia and Zimbabwe.
Retail contribution up from 22% in Jun-11 to 36%
in Jun-12.
BancABC Half Year Financial Results 2012 * Restated: BancABC Microfin’s total income moved from wholesale into retail
35
Income Statement – Segmental Analysis
Total net interest income by business and subsidiary
BWP'000
Jun-12
Jun-12
Wholesale Wholesale
Jun-11
Retail
Jun-11
Retail
BancABC Botswana
42,332
28,562
48,129
1,308
BancABC Mozambique
37,882
17,953
8,520
2,514
BancABC Tanzania
10,410
23,513
4,923
1,064
4,666
2,728
29,170
35,336
BancABC Zimbabwe
73,235
57,713
21,822
7,637
Banking Operations
Head office entities
168,525
130,469
112,564
47,859
(7,419)
13,026
-
-
Total
161,107
143,495
112,564
47,859
BancABC Zambia
Growth across all
subsidiaries other than
Tanzania
BancABC Half Year Financial Results 2012
Retail NII up 135%
Wholesale NII up 29%*
Retail contribution up to
41% from 25%
* Excluding Head office entities
Lower margins in
Tanzania
36
Income Statement – Net Interest Income
Overall Group margins at 6.2%
(2011: 6.5%)
BancABC Half Year Financial Results 2012
Positive trend in net interest income
driven by increased balance sheet
size – growth in Consumer Lending
37
Income Statement – Impairments & NPLs
Gross and net NPL ratios
reduced marginally during
the period
Credit loss ratio declined
from 1.2% to 0.8%
BancABC Half Year Financial Results 2012
Increased NPLs in
Mozambique, Tanzania
and Zimbabwe
Change for impairments
in Botswana higher
mostly due to increased
loan book size
38
Income Statement- Cost to Income
Cost to income
ratio marginally up
– retail expansion
BancABC Half Year Financial Results 2012
On target in the
short to medium
term Still
maintained at 50%
39
Operating Expense per Entity
140,000
120,000
BWP '000
100,000
80,000
60,000
40,000
20,000
-
Jun-08
Jun-09
Jun-10
Jun-11
Jun-12
Increase in costs largely driven by retail banking expansion
BancABC Half Year Financial Results 2012
40
Income Statement- Opex per entity
Operating expenses (BWP’000)
BWP'000
Jun-12
Jun-11
Wholesale Wholesale
Jun-12
Retail
Jun-11
Retail
BancABC Botswana
35,942
26,388
27,583
10,425
BancABC Mozambique
29,375
21,266
21,822
11,678
BancABC Tanzania
30,911
25,157
10,129
5,055
BancABC Zambia
16,859
36,158
38,364
2,889
BancABC Zimbabwe
79,690
44,520
44,370
17,293
Banking Operations
Head office entities
192,777
153,489
142,267
47,340
36,904
39,402
7,068
3,794
Total
229,681
192,891
149,335
51,134
Wholesale banking costs up 19%
Retail banking costs up 192%
BancABC Half Year Financial Results 2012
Wholesale banking contribution down to 61% from 79%
Retail banking contribution up to 39% from 21%
41
Balance Sheet Overview
Balance sheet grew by 18%
from BWP9.2 billion in
December 2011 & by 47%
from BWP 7.3 billion in June
2011 to BWP10.8 billion
Deposits grew by 19% from
BWP7.4 billion in December
2011 & by 46% from BWP 6.0
billion in June 2011 to
BWP8.8 billion
Loans and advances increased
29% from BWP6.1 billion in
December 2011 & by 95%
from BWP 4.0 billion in June
2011 to BWP7.8 billion growth mostly from Botswana
Total Equity grew by 9% from
BWP613 million in December
2011 & by 42% from BWP 469
million in June 2011 to BWP
666 million
BancABC Half Year Financial Results 2012
42
Balance Sheet
BWP '000s
Jun -12
Jun-11
% change
Dec-11
Cash and short term funds
988,788
1,356,617
-27%
1,243,431
Financial assets held for trading
544,474
1,030,839
-47%
651,049
90,053
84,135
7%
185,412
7,817,545
4,018,987
95%
6,077,399
Property and equipment
576,491
392,799
47%
514,880
Other Investments
352,005
154,046
129%
138,070
Prepayments and others assets
453,191
327,815
38%
373,647
10,822,547
7,365,238
47%
9,183,888
Deposits
8,781,462
6,004,301
46%
7,374,700
Borrowed funds
1,130,944
682,839
66%
981,788
244,283
208,610
17%
214,833
10,156,689
6,895,750
47%
8,571,321
649,903
453,116
43%
596,811
15,955
16,372
-3%
15,756
665,858
469,488
42%
612,567
10,822,547
7,365,238
47%
9,183,888
Financial assets designated at fair value
Loans and advances
TOTAL ASSETS
Other liabilities
Total liabilities
Equity attributable to ordinary shareholders
Minority interest
Total equity
TOTAL EQUITY AND LIABILITIES
BancABC Half Year Financial Results 2012
43
Balance Sheet- USD
BWP '000s
Cash and short term funds
Jun -12
Jun-11
% change
Dec-11
129,185
207,562
-38%
166,122
Financial assets held for trading
71,136
157,707
-55%
86,980
Financial assets designated at fair value
11,765
12,884
-9%
24,771
1,021,362
614,905
66%
811,940
Property and equipment
75,319
60,098
25%
68,788
Other Investments
45,990
23,569
95%
18,447
Prepayments and others assets
TOTAL ASSETS
59,209
1,413,966
50,156
1,126,881
18%
25%
49,920
1,226,968
Deposits
1,147,298
918,658
25%
985,260
Borrowed funds
147,758
104,474
41%
131,167
Other liabilities
31,915
31,917
0%
28,702
1,326,971
1,055,049
26%
1,145,129
84,910
69,327
22%
79,734
2,085
2,505
-17%
2,105
86,995
71,832
21%
81,839
1,413,966
1,126,881
25%
1,226,968
Loans and advances
Total liabilities
Equity attributable to ordinary shareholders
Minority interest
Total equity
TOTAL EQUITY AND LIABILITIES
BancABC Half Year Financial Results 2012
44
Balance Sheet- Loans and Deposits
29% growth
in loans since
Dec – 11
95% YoY
48% CAGR
since Jun-08
BancABC Half Year Financial Results 2012
19% increase
in deposits
since Dec-11
46% YoY
40% CAGR
since Jun-08
45
Balance Sheet – Segmental Analysis
Loans and advances by business and subsidiary
BWP'000
Jun-12
Jun-11
Wholesale Wholesale
BancABC Botswana
Jun-12
Retail
Jun-11
Retail
1,539,202
825,315
1,228,008
14,490
BancABC Mozambique
715,634
500,338
111,174
40,478
BancABC Tanzania
587,178
418,976
67,103
22,277
BancABC Zambia
253,600
84,602
518,030
201,392
BancABC Zimbabwe
1,862,894
1,354,846
586,488
145,817
Banking Operations
Head office entities
4,958,508
3,184,077
2,510,803
424,454
348,234
410,456
-
-
Total Loans and Advances
5,306,742
3,594,533
2,510,803
424,454
48% growth in Wholesale Loans mainly due to
Botswana, Mozambique and Zimbabwe.
Wholesale contribution to total Loans and advances
down from 89% in Jun-11 to 68% in Jun-12.
BancABC Half Year Financial Results 2012
492% growth in Retail Loans mainly due to
Botswana, Zambia and Zimbabwe.
Retail contribution to total Loans and advances up
from 11% in Jun-11 to 32% in Jun-12.
46
Balance Sheet – Segmental Analysis
BWP'000
Jun-12
Jun-11
Wholesale Wholesale
Jun-12
Retail
Jun-11
Retail
BancABC Botswana
3,236,303
1,929,167
227,454
55,079
BancABC Mozambique
1,028,260
822,667
267,209
159,648
BancABC Tanzania
927,226
972,753
47,838
14,796
BancABC Zambia
585,322
375,629
27,493
18,229
2,218,362
990,578
215,995
665,755
7,995,473
5,090,794
785,989
913,507
BancABC Zimbabwe
Total Deposits
46% growth in deposits largely driven by Botswana and Zimbabwe
57% growth in Wholesale deposits mainly due to
Botswana, Mozambique and Zimbabwe.
Wholesale contribution to total deposits up from
85% in Jun-11 to 91% in Jun-12.
BancABC Half Year Financial Results 2012
14% decrease in Retail deposits mainly due to
withdrawal of a large short term deposit in
Zimbabwe. Retail contribution to total deposits
down from 15% in Jun-11 to 9% in Jun-12.
47
Balance Sheet – Capital Adequacy
Total Capital (BWP m)
Subsidiary
Capital Adequacy Ratio
Jun-12
Jun-11
Min Jun-12
Jun-11
BancABC Botswana
345
173
15%
15%
20%
BancABC Mozambique
249
177
8%
15%
22%
BancABC Tanzania
150
132
12%
15%
15%
BancABC Zambia
196
89
10%
19%
21%
BancABC Zimbabwe
421
216
10%
11%
15%
US $50 million rights offer successfully completed in July 2012
However, current business growth entails raising additional capital
Plan is to raise between US $75 - $100 million in tier II capital
Zim has new capital reqs and min CAR = 12% effective 1 Aug 2012
BancABC Half Year Financial Results 2012
48
BancABC Tanzania Challenges
BancABC Tanzania recorded a loss of
BWP5 million in current period due
to reduction in interest margins and
high impairment charges
Tanzania
Population: 43m
GDP size: US$25 bn
Banking Assets: US$9.8bn
Entity also had a loss in 2011 of
BWP3.3 million – MTM losses, high
impairments
Entity was profitable in the
preceding four years prior to 2011
Historically Tanzania had low capital
levels, low single obligor limits
High NPLs exacerbated by a slow
legal process
BancABC Half Year Financial Results 2012
49
Tanzania market analysis
Tanzania remains an attractive
market
• Second largest economy in East Africa
• Between 6%-7% Annual Real GDP growth rate
since 2003
• Steady growth in banking assets and liabilities yoy
• Larger players dominate the market
Top 3 Banks in
Tanzania
2010
2011
2010
2011
Assets
44.50%
39.90%
1.80%
1.70%
Deposits
53.60%
48.50%
1.50%
1.70%
Loans
44.20%
41.90%
1.70%
1.60%
BancABC has grown steadily:
• BancABC’s CAGR consistently grew faster than
the market between 2002 and 2011
• Capital increased from $1m in 2002 to $20m in
2012
• Quick resolution of remaining NPLs
• Business expansion – wholesale and retail (SMEs,
group schemes and consumer lending segment)
BancABC Half Year Financial Results 2012
BancABC TZ
From 2002 To 2011
CAGR
Total Market
CAGR
BancABC TZ
Deposits
17.6%
26.8%
Loans
26.4%
36.2%
Assets
19.2%
29.5%
50
Head office entities
Head office now funded
predominantly by
dividends
Subsidiary dividends and
intra-group interest
eliminated on consolidation
Management fees (full cost
re-charge) discontinued
after 2008
Income in 2012 lower due
to reduction in liquidity and
increased liabilities to
capitalize subsidiaries
ahead of completion o
right s issue
Improved subsidiaries
performance to lead to
better funding for H/O
Balance sheet restructuring
to lead to increased
liquidity and income
Tax losses in ABCH
company to be utilized as
far as possible
BancABC Half Year Financial Results 2012
51
Strategy and Outlook
DOUGLAS MUNATSI
BancABC Half Year Financial Results 2012
Key successes
Completed rights offer of US$50 million
Recapitalised all banking operations as
planned
Expanded retail outlets across footprint
and introduced retail products/functionality
Grown retail to profitability in Botswana,
Zambia and Zimbabwe
Expanded wholesale business in all
operations
BancABC Half Year Financial Results 2012
53
Challenges and resolution processes
Capital to support current
growth trajectory
Raising additional capital
Liquidity to fund business
expansion
Arranging lines of credit at centre
and subsidiary level
High impairments
In process of resolving all key NPL
accounts
High costs
To stabilize costs and hence reduce
cost to income ratio
BancABC Half Year Financial Results 2012
54
Short to medium term objectives
Raise
between US
$75 - $100
million in tier
II capital
Additional
capital for
Botswana
and
Zimbabwe
BancABC Half Year Financial Results 2012
Expand retail
in Tanzania
and
Mozambique
Continue
increasing
retail outlets
Improve
liquidity for
the Group
through
additional
lines of
credit and
other forms
of funding
55
Dividend declaration
As per Group Policy, a dividend of 8 thebe (about
1 US cent) per share to be paid on 21 Sep 2012
to shareholders on register on 7 Sep 2012
BancABC Half Year Financial Results 2012
56
THANK YOU
BancABC Half Year Financial Results 2012
57