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19 results presentation for the year ended 30 June RESULTS - PDF document

Feb 17, 2023 •204 likes •832 views

19 results presentation for the year ended 30 June RESULTS PRESENTATION JUNE 2019 :: 01 Introduction results presentation 18 for the six months ended 31 December The group delivered premium returns and real growth in earnings against

  1. 19 results presentation for the year ended 30 June

  3. RESULTS PRESENTATION – JUNE 2019 :: 01 Introduction results presentation 18 for the six months ended 31 December ’ The group delivered premium returns and real growth in earnings against a tough macro backdrop Cents 22.8% ROE 600 .  6% 500 497.3 470.8 436.2 400 407.4 378.5  6% 300 291.0 275.0 255.0 226.0 200 210.0 100 0 2015 2016 2017 2018 2019 Diluted normalised earnings per share Dividend per share

  4. 02 :: FIRSTRAND GROUP | Introduction continued Continued track record of shareholder value creation with NIACC of R10.7 billion NIACC * ROE and COE R million 24.7% 24.0% 12 500 25% 23.4% 23.0% 22.8% 10 729 10 000 20% +8% 9 968 9 694 9 548 9 086 7 500 15% 14.5% 14.3% 14.3% 14.0% 13.5% 5 000 10% 2 500 5% 0 0% 2015 2016 2017 2018 2019 NIACC ROE Cost of equity (COE) * Net income after cost of capital. Key take-outs • Despite a year-on-year decrease of ±R1.5 billion in pre-tax private equity realisations: • Group grew earnings 6% in a market offering limited growth • Produced an ROE above its target range • FNB outperformed on growth, returns and efficiencies • RMB’s portfolio excluding private equity grew 12% • In a declining market, WesBank sacrificed growth to protect returns • Aldermore remained earnings and ROE accretive (+20 bps) • Credit noisy due to IFRS 9 but operational credit performance in line with risk appetite • Strong capital rebuild, with CET1 ratio above 12%

  5. RESULTS PRESENTATION – JUNE 2019 :: 03 Geographic and activity diversification underpins portfolio performance NORMALISED EARNINGS 2019 2018 % change ROE % R million 11  FNB 17 637 15 865 41.9 (4)  RMB 7 086 7 353 21.7 (2)  WesBank 1 808 1 854 18.5 >100  Aldermore 1 658 276 13.1 * * ROE excludes MotoNovo and upfront capital injection (12.9% in pound terms). FNB produced strong growth in profits and delivered improved returns NORMALISED PBT ROE R million % 30 000 45 41.9% 39.7% 38.8% 38.4%  11% 40 37.3% 36.9% 25 000 25 348 35 22 814 20 000 30 18 624 17 883 25 16 536 15 000 20 14 240 10 000 15 10 5 000 5 - 0 * 2014 2015 2016 2017 2018 2019 * 2018 figures have been restated for DirectAxis, Discovery card, WesBank rest of Africa and Group Treasury reallocations.

  6. 04 :: FIRSTRAND GROUP | Introduction continued Excellent domestic performance , strong recovery in the rest of Africa NORMALISED PBT R million 18 000  13% 16 000 14 000 12 000 10 000 8 000  5% 6 000 4 000  6%  25%  30% 2 000 0 (2 000)  8% (4 000) # * † ** Transactional Term lending Save and invest Insurance Rest of Africa Other 2018 ‡ 2019 * Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. ** Save and invest includes non-transactional deposits. # Insurance includes embedded credit life. † Includes India (FNB activities in India have been discontinued). ‡ 2018 figures have been restated for DirectAxis, Discovery card, WesBank rest of Africa and Group Treasury reallocations. RMB delivered a resilient performance … NORMALISED PBT ROE R million % 25.8% 15 000 27 25.2 % 25.3 % 24.2 % 24 21.7 % 12 500 21 10 387 10 065 (  3%) 10 000 18 1 774 2 122 9 781  20% 15 8 918 8 613 7 500 8 136 7 943 12  8% 5 000 9 6 2 500 3 - 0 * 2015 2016 2017 2018 2019 Total RMB SA and other Rest of Africa ** * 2018 figures have been restated for Group Treasury reallocations. ** Strategy view including in-country and cross-border activities.

  7. RESULTS PRESENTATION – JUNE 2019 :: 05 …despite Private Equity realisation rebase of R1.5 billion NORMALISED PBT R million 6 000  8% 5 000 4 000 3 000  12%  24% 2 000  54% 1 000 0  4% -1 000 Investment banking Corporate and Markets and Investing Other* and advisory transactional banking structuring 2018 2019 * Includes investment management and other central portfolios. Solid domestic client performance, strong growth in the rest of Africa REST OF AFRICA * NORMALISED PBT RMB SOUTH AFRICA AND OTHER NORMALISED PBT R million R million 10 000 2 300  20% +45%  8% 9 000 2 100  50% 8 000 1 900  54% 1 700 7 000  16% 1 500 6 000 +11% 1 300  8% 5 000  18% 1 100 4 000 900 3 000 700  8% 2 000 (2%) 500  13% 1 000 300 -  13% 100 -1 000 (65%)  >100% - 100 2018 2019 2018 2019 Investing Other ** IB&A C&TB M&S * Strategy view including in-country and cross-border activities. ** Includes investment management and other central portfolios.

  8. 06 :: FIRSTRAND GROUP | Introduction continued WesBank focused on protecting origination franchise and returns in tough market NORMALISED PBT ROE R million % 3 500 22 • VAF performance reflects 20 18.5 • Scorecard risk cuts in retail, and 3 000 17.4 18  2% corporate and commercial 16 2 500 2 643 2 580 • Difficult trading environment 14 2 000 12 • ROE improvement primarily driven 10 1 500 by capital optimisation and other 8 initiatives 1 000 6 4 500 2 - 0 * 2018 2019 * 2018 figures have been restated for move of DirectAxis and WesBank rest of Africa to FNB, and MotoNovo to FCC/Group Treasury. Aldermore tracking investment case 2019 total 2019 Aldermore Aldermore Group excl. Group MotoNovo FINANCIAL HIGHLIGHTS (£ million) (£ million) 90 94 Normalised earnings Normalised PBT 130 136 Total assets 12 530 12 054 Total liabilities 11 435 11 014 Net interest margin (%) 3.24 3.29 NPLs (%) 1.21 1.25 ROE * (%) 12.9 * ROE excludes MotoNovo and upfront capital injection.

  9. RESULTS PRESENTATION – JUNE 2019 :: 07 Unpacking performance against strategy results presentation 18 for the six months ended 31 December ’ Group strategic framework FirstRand commits to building a SHARED FUTURE of prosperity through enriching the lives of its customers, employees and the societies it serves. This is the foundation to a sustainable future and will preserve the group’s enduring promise to create long-term value and superior returns for its shareholders. DELIVERED THROUGH CURRENT STRATEGIES: Increase diversification – activity and geography Protect and grow Broaden financial Portfolio approach Grow a more valuable banking businesses services offering to the rest of Africa UK business SOUTH AFRICA REST OF AFRICA UK Build a platform-based integrated Better leverage Scale, disrupt existing portfolio and digitise financial services business Enabled by disruptive digital platforms Underpinned by disciplined management of financial resources and empowered people

  10. 08 :: FIRSTRAND GROUP | Unpacking performance against strategy continued Measuring execution on strategic priorities Protect and grow Broaden financial Portfolio approach Grow a more valuable banking businesses services offering to the rest of Africa UK business SOUTH AFRICA REST OF AFRICA UK Enabled by disruptive digital platforms Underpinned by disciplined management of financial resources Strength of FNB’s transactional franchise reflects consistent strategy NORMALISED PBT R million TRANSACT 18 000  13% • Grow and retain core transactional accounts 16 000 14 000 • Behavioural analytics driving: 12 000 • Cross-sell and up-sell 10 000 • Origination scorecards 8 000 • Rewards  5% 6 000 4 000 • Rebase in vertical sales index (VSI) due to 2 000 product rationalisation: Jun 18: 2.97, 0 Dec 18: 2.69, Jun 19: 2.86 * Transactional Term lending 2018 ** 2019 * Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. ** 2018 has been restated for DirectAxis and Discovery card.

  11. RESULTS PRESENTATION – JUNE 2019 :: 09 FNB’s lending activities benefit from targeted origination strategies NORMALISED PBT LEND R million 18 000 • Strong unsecured credit growth from  13% 16 000 lending primarily to main-banked 14 000 customers 12 000 • Growth in key commercial segments 10 000 and product lines 8 000  5% 6 000 • Secured and unsecured leveraging: 4 000 • Digital platforms for origination 2 000 • Customer behaviour analytics 0 * Transactional Term lending 2018 ** 2019 * Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. ** 2018 has been restated for DirectAxis and Discovery card. Volume growth supported by successful digital strategy Customer * growth = +1% Digital platforms support volume growth Transaction volumes (millions) Segment % change 23 20 Online Consumer (4) 17 14 Premium +17 11 8 Commercial +11 5 FNB app monthly logins: 45.5 million 2 -1 Volume growth Channel % change Successful strategy to migrate customers from physical to digital ATM/ADT +1 Internet (4) Digital Banking app +45 Physical 28% 33% Mobile (4) 2009 2019 Point-of-sale merchants +17 67% Physical Card swipes +11 72% Digital * Excludes DirectAxis non-banked customers.

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