Investor Seminar Africa & Middle East 27 November 2019
Agenda Webcast session Bill Winters Group Chief Executive Sunil Kaushal Regional CEO Rola Abu Manneh CEO, UAE Mohamed A. Bary Regional CFO Ian Bryden Regional CRO Non-webcast focus areas: Razia Khan Regional Chief Economist The macroeconomic Abbas Husain Head of Project & Export Finance, MENAP backdrop supports structural Neil Van Niekerk Head of Project & Export Finance, Africa long-term growth Abdoul Aziz Ba Regional Head of PSDO The region contributes to and Saif Malik Regional Co-head, Global Banking benefits from the Group’s Philip Panaino Regional Head, Transaction Banking network proposition We are embracing digitisation Jaydeep Gupta Regional Head, Retail Banking and partnerships to transform Yustus Aribariho Regional Head, Digital Banking Retail Banking 1
Group Chief Executive Bill Winters 2
Our Africa & Middle East franchise is central to the Group’s overall investment case We are making good progress executing the Group’s strategy • Our turnaround in recent years has created a stronger and more resilient business, with a better focus on its clients • The disciplined execution of that strategy has resulted in Group profit improving 14% so far this year 1 • Africa & Middle East has contributed to this improvement, with profits in the region growing 26% • Our progress enables us to face a more challenging external environment confidently Our AME franchise is distinctive, and its performance is critical to achieving our strategic priorities • Our non-replicable franchise in the region is a key part of our global corporate and institutional network business • The local team is taking the lead in transforming our digital capabilities • We are supporting sustainable growth in the region; making a difference where it matters the most 1. Group and Africa & Middle East underlying profit before tax 9M’19 versus 9M’18, at constant currency 3
Sunil Kaushal Rola Abu Manneh Mohamed A. Bary Ian Bryden Regional CEO CEO, UAE Regional CFO Regional CRO 4
What you will hear today We are making Our broad and Digitisation and The macro- good progress in deep-rooted partnerships will economic executing our presence transform our backdrop supports strategic priorities differentiates us Retail Banking long-term franchise structural growth 5
We have a deep-rooted and distinctive franchise in Africa & Middle East A trusted and respected business with differentiated product capabilities across 25 markets The AME region in 2019 1 contributed: 17% of the Group’s income 7 of its 20 highest income markets and 8 of its 20 most profitable markets and 15% of the Group’s profits 15 markets in Sub-Saharan Africa 10 markets in the Middle East • The only global bank with a deep presence … • Leading project finance, DCM and Islamic banking capabilities • …providing access on the ground to MNCs • Best international bank in 6 markets 3 • Best Consumer Digital Bank in Africa 2 • Best bank for Infrastructure/Project Finance 4 1. 9M’19 financial metrics 2. Global Finance Awards - Best Consumer Digital Bank in Africa 6 3. EMEA Finance Middle East Banking Awards - Best foreign bank in Bahrain, Iraq, Oman, Pakistan, Qatar and UAE 4. Asiamoney - New Silk Road Finance Awards - Best Bank for Infrastructure and Project Finance in Middle East & Africa
We have the experience required to manage inherent risks Our understanding of the risks in the AME region gives us a competitive advantage Perceived risks high relative to other regions… …mitigated by our deep local knowledge • Challenging macroeconomic outlook • The first bank in some AME markets... • Volatile economic growth • …and the only global bank in many • Currency movements and depreciation • Strong public sector and multilateral relationships • Geopolitical tension • Risk distribution via capital markets / insurance • Higher financial crime and sanction risks • Investment in global compliance standards 7
The macroeconomic backdrop supports long-term structural growth Regional headwinds recently; but demographics, urbanisation and infrastructure demand should support growth • By 2050 AME will be home to around 3.4bn people – likely to be more than China and India combined • Africa will have the largest working age population in the world by 2040 Sub-Saharan Africa - Real GDP growth rate (%) 1 GCC and Pakistan - Real GDP growth rate (%) 1 GDP $1.3tn; Population 551m GDP $2.2tn; Population 307m GCC 4.4% Pakistan 3.9% 3.5% 5.1% 2.8% 2.7% 2.7% 2.5% 4.3% 2.4% 2.3% 2.3% 0.8% 2.1% 0.7% 0.0% 2009-14 2015 2016 2017 2018 2019e 2020e 2021e 2009-14 2015 2016 2017 2018 2019e 2020e 2021e Young population and increasing urbanisation Largest share of Global oil reserves Significant share of commodities reserves Home to some of the World’s richest countries Growing trade corridors with Middle East / Asia UAE is a major trade and logistics hub Demand for infrastructure and digitisation Diversification / private sector participation 1. Average GDP growth in PPP (purchasing power parity) weighted for presence markets 8
We have built a stable platform in Africa & Middle East Actions taken between 2015 to 2018 to secure our foundations have resulted in a leaner and more resilient business • Income broadly flat on a constant currency basis 1 , with underlying growth masked by de-risking • Deliberate de-risking actions and regulatory changes 2 led to ~$230m income attrition • Partially offsetting underlying growth of ~$260m / 4% compound annual growth rate • Expenses held flat, with people and property cost savings reinvested primarily in digital Profit before tax • Substantially improved credit quality • Tighter underwriting standards imposed +41% CAGR • Reduced exposures in riskier sub-segments 2015 to • Loan-loss rate improved from ~270 to ~90bps 2018 1. Down 3.1% CAGR on a reported basis and flat on a constant currency basis, 2018 versus 2015 2. Regulatory changes included the introductions of an interest rate cap in Kenya and a cash reserve ratio increase in Nigeria 9
We are executing the strategic priorities The Africa & Middle East region has a key role to play in delivering the Group’s strategic priorities We are actively embracing The region contributes to and benefits digitisation and partnerships to from the global network , and we have Deliver our reinforce competitive advantages a differentiated affluent franchise network Transform Grow our and disrupt affluent with digital business Purpose and people We will continue to streamline We are working to eliminate residual operations to enhance client drags on our returns from markets Optimise satisfaction and drive productivity including the UAE Improve low- productivity returning markets 10
Our non-replicable network capabilities continue to generate income growth at premium returns Network Affluent Productivity Digital Optimise Purpose The breadth of our CIB network across 25 markets creates multiple opportunities to grow Monetising the network 9M YoY 1 • 80% of our top Corporate & Institutional clients use the AME network Clients • We aim to become the go-to bank for our network clients ‘Next + New’ +38% income 2 Focus on inbound corridors Income • Traditional corridors from West remain strong; Asia is +18% becoming more significant Network 3 • Two-thirds of the Group’s Belt & Road pipeline is in AME Network returns Significant conduit of trade and investment AME RoTE 12.9% 19.1% +620 bps • Leading capital raising capability 12.2% 16.5% Group RoTE • Largest Project and Infrastructure Finance business 9M’17 9M’18 9M’19 1. Financial information on this slide relates to the Corporate & Institutional Banking segment only 2. ‘Next’ clients are those that have the potential to deliver significant and sustainable income growth; ‘New’ clients are new-to-bank, mainly based in OECD markets 11 3. ‘Network’ income is that generated outside of a client’s headquarter country (excluding risk management, trading and ship leasing)
We are investing to reinforce our differentiated affluent franchise in the region Network Affluent Productivity Digital Optimise Purpose The affluent segment in AME is smaller than in most of our other regions, but we are leading its development Lead in wealth and bancassurance solutions 9M YoY • Unique open architecture platform Markets with bancassurance solutions +25% 5 8 10 • Importing proven innovations from other regions (#) Strengthen emerging affluent proposition 41 +9% Active Priority WM 1 clients 37 • Launch Premium banking 5 in top markets 36 (000’s) 2 • Digitise and develop bancassurance and wealth solutions 3.7 3.2 2.9 WM AUM 3 +15% Build alliance and key partnerships ($bn) • Co-working to provide digital wealth and investment solutions • Alliances with Telcos to accelerate customer acquisition +571bps WM + Deposits income 4 60 60 66 (%) • Differentiating with client-centric lifestyle offers Accelerate client acquisition to achieve scale 9M’17 9M’18 9M’19 1. WM = Wealth Management 5. Premium is a Retail Banking sub-segment that sit between 2. Total active ‘Priority’ Retail Banking clients across AME Personal and Priority 12 3. Assets under management 4. WM+ Deposits income as a proportion of total Retail Banking income
Recommend
More recommend
