Q1 2020 RESULTS 1 CUSTOMERS 28.0 MILLION OUR REGIONAL 344 - PowerPoint PPT Presentation

Q1 2020 RESULTS 1

CUSTOMERS 28.0 MILLION OUR REGIONAL 344 BRANCHES PRESENCE 1,058 ATMS, 21,681 AGENTS & MERCHANTS Banking Businesses: • KCB Bank Kenya STAFF • KCB Bank Tanzania • KCB Bank South Sudan 7,561 • KCB Bank Rwanda • KCB Bank Uganda • KCB Bank Burundi KCB BANK KENYA (ETHIOPIA • National Bank of Kenya REPRESENTATIVE KCB BANK • Ethiopia Rep. Office OFFICE ) SOUTH SUDAN KCB BANK KENYA Other Investments: KCB BANK NATIONAL BANK OF KENYA • KCB Capital Limited UGANDA KCB INSURANCE AGENCY KCB FOUNDATION • KCB Insurance Agency KCB CAPITAL • KCB Foundation KCB BANK RWANDA • Kencom House Limited KCB BANK KCB BANK BURUNDI TANZANIA 2

OUR FOOTPRINT Ethiopia Branches 11 South ATMs 3 Agents 25 (Representative Office Sudan with 1 staff) Staff117 Touch Points: Branches 15 Uganda ATMs 18 Agents 522 Branches 286 Staff 330 ATMs 456 Kenya Agents 12,096 Branches 12 Staff 6,469 ATMs 26 Rwanda Agents 324 Staff 240 Branches 14 ATMs 15 T anzania Branches 6 Agents 144 ATMs 7 Staff 287 Burundi Agents 207 Staff 117 3

STABLE CREDIT RATINGS RATING AGENCY SOVEREIGN KCB BANK KENYA B2 B2 (Negative) (Negative) B+/B B+/B 4

Central Bank Rates lowered across the region: CBR Kenya: 100 bps reduction to 7.25% Uganda: 100bps reduction to 8.0% Further reduction by MPC Q1 2020 by 25 bps to 7.00% HIGHLIGHTS Rwanda: 50bps reduction to 4.5% 200bps reduction of the Tanzania: discount rate to 5.0% Responses to COVID-19 Pandemic Cash Reserve Ratios lowered across the region by 100bps CRR Rwanda: 4.0% Kenya: 4.25% Tanzania: 6.0% 5

Provision of exceptional liquidity assistance to banks and increase in maximum Repurchase Agreements (REPOs) tenures in Kenya, Rwanda and Uganda. LIQUIDITY Reduction of haircuts on government securities in Tanzania; From 10% to 5% Q1 2020 for Treasury bills and from 40% to 20% for Treasury bonds. HIGHLIGHTS Responses to Easing of loan repayment conditions for impacted borrowers and approval for LOAN COVID-19 RESTRUCTURING banks to restructure the affected loans in Kenya, Rwanda, Uganda and Tanzania Pandemic Lowering of VAT, Personal and Corporation income tax rates in Kenya. FISCAL Expediting VAT refunds and deferment of tax payment obligations for the most INTERVENTIONS affected sectors in Rwanda and Uganda 6

KCB 2JIAJIRI AGRIBUSINESS 2JIAJIRI BENEFICIARIES PROGRAMME 19,080 PER SECTOR BUILDING AND HIGHLIGHTS CONSTRUCTION 9,910 BEAUTY AND PERSONAL CARE 3,480 AUTOMOTIVE ENGINEERING FUTURE OF 2JIAJIRI 2,083 Catalyze job and wealth DOMESTIC creation for at least SERVICES 1,638 2,000,000 36,706 youth engaged in the informal ICT BENEFICIARIES TO 515 sector within Eastern Africa DATE 5-year investment of over KShs 50 billion Male : Female Ratio to nurture and grow youthful and Kenya SME entrepreneurs 35,949 54:46 Tanzania ‘Young Africa Works’ 357 KShs 10 billion funding Rwanda from the MasterCard Foundation 300 to scale up the Bank’s 2jiajiri job Uganda 100 creation programme 7

Juliana Githieya, Owner, Ashleys Mtaani Barber & Salon, Nairobi • 2jiajiri beauty and personal care graduate. • Utilised a KShs. 5 million loan from KCB to open KCB FOUNDATION Ashleys Mtaani salon in Nairobi under the franchise agreement between Ashleys and KCB Foundation . CASE STUDIES • Employs 3 fellow 2jiajiri graduates in her business. • Makes on average KShs 700,000 per month. Salome Malala, Owner, Birunji General Works Limited, Kisumu • Started off as a casual house help ( mama nguo ). • Studied welding and fabrication at Kisumu National Polytechnic under KCB Foundation’s 2jiajiri and GIZ’s E4D/SOGA – Employment and Skills for Eastern Africa Programme and also received toolkits. • Employs 3 fellow youth and undertakes major welding and fabrication works in Kisumu and neighbouring Siaya County. 8

MAINSTREAMING SUSTAINABLE DEVELOPMENT GOALS SUSTAINABILITY • Cumulatively, loans amounting to KShs. 447 billion UPDATE have been screened for ESDD compliance since 2015. • In 2019 the Group adopted SDG 13 on Climate Action in line with the collective commitment to climate action by the founding banks of the recently launched Principles of Sustainable Banking. • Commitment to be a carbon neutral business by 2028. • 26 staff engagements in integrating Sustainability in the new 2020 – 2022 Beyond Banking Strategy have been conducted reaching 50% of the total Group staff. STAKEHOLDERS ALIGNMENT CLIENTS & CUSTOMERS PRINCIPLES FOR GOVERNACE & TARGET TRANSPARENCY & RESPONSIBLE IMPACT SETTING ACCOUNTABILITY BANKING 9

Macro-Economic Highlights 10

MACROECONOMIC HIGHLIGHTS Kenya 34.1 8.5 7.6 7.5 8.8 5.4% 7.8 6.9 6.6 6.6 6.4 5.8 5.4 5.3 3.6 3.2 2.5 6.0 1.2 1.0% 5.6 4.2 1.5 0.7 AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT & FINANCIAL & CONSTRUCTION ICT HEALTH MINING& 2020 2019 ESTATE STORAGE INSURANCE QUARRYING Projection Growth Contribution to GDP 2019 (%) 2019 Growth (%) Sources: -Kenya National Bureau of Statistics -IMF 11

MACROECONOMIC HIGHLIGHTS GDP Growth (%) Sub-Saharan Africa GDP Growth (%) 11.3 10.1 9.0 6.3 4.9 4.9 3.1 3.5 3.5 3.2 2.0 1.8 2020 Projection Uganda Burundi Rwanda South Sudan 2019 Ethiopia Tanzania - 1.6 -5.5 2019 2020 Growth Projection Source: IMF 12

Inflation Evolution(%) Inflation Target Target Non Food MACROECONOMIC rate Upper Lower Fuel 7.5 HIGHLIGHTS 6.58 6.37 6.27 6.06 5.82 5.78 5.70 5.56 5.49 5.00 4.95 4.35 Kenya 3.83 3.1 2.5 2.2 MAR MAR APR M AY JUN JUL AUG SEP OCT NOV DEC JAN FEB 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2019 2 0 1 9 2 0 1 9 2019 2 0 2 0 2020 2020 Interest Rates Evolution (%) 12.51 12.51 12.47 12.47 12.46 12.47 12.39 12.43 12.38 12.24 12.29 12.19 12.19 8.5 9.0 8.25 7.25 7.31 7.08 7.41 7.17 7.29 7.28 7.17 6.65 6.90 6.62 6.56 6.60 6.65 MAR APR M AY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2019 2 0 1 9 2 0 1 9 2019 2 0 2 0 2020 2020 Sources: Central Bank of Kenya 91 day bill Average Lending Rate CBR Kenya National Bureau of Statistics 13

USD/KShs. Average Monthly Exchange Rate 103.8 103.7 103.7 103.3 103.2 MACROECONOMIC 102.4 101.7 HIGHLIGHTS 101.6 101.5 101.2 101.1 101.1 100.8 100.4 100.2 Currency Movement MAR APR M AY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2019 2 0 1 9 2 0 1 9 2019 2 0 2 0 2020 2020 Exchange Rates, Local Currency to USD 3,797 3,707 2,290 2,289 1,900 1,826 930 160 902 33 130 28 Mar 2019 Mar 2020 Rwanda Ethiopia Tanzania Uganda Burundi South Sudan 14

Current Account Balance (% of GDP) MACROECONOMIC HIGHLIGHTS Kenya -5.8 -5.8 -5.8 -5.8 -6.2 -6.9 -7.2 2015 2016 2017 2018 2019 March 2020 Diaspora remittances Restated Restated Restated Restated 2020 Restated Projected 1Q20: $ 707.3M 6% 1Q19: $ 665.8M 12 Month Private Sector Growth 8.9% 7.7% 7.3% 7.3% 7.1% 7.0% 6.6% 6.3% 6.1% 5.2% 4.9% 4.4% 4.3% MAR APR M AY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2 0 1 9 2019 2 0 1 9 2 0 1 9 2019 2 0 2 0 2 0 2 0 2020 15

Channel Performance 16

Q1 2019 OUR CHANNEL AGENCY, BRANCH ATMS INTERNET MOBILE TELLER CONTRIBUTION 56% 8% AND POS 9% 27% 97% of Q1 2020 transactions performed AGENCY, BRANCH outside the ATMS INTERNET MOBILE TELLER 73% AND POS 4% 3% branch 20% 65% 1 1% decrease in average transactions / 40% decrease in Number of branch growth in tellerper day transactions. non-branch revenue to Q1 2019 Q1 2019 70.3 4.0 2.8B Q1 2020 Q1 2020 62.6 2.4 Number of Branch Transactions( M ) A vg. Transactions / T eller perday 17

V alueof Transactions: Mobi Service No. of Mobile Transactions Mobile Revenue (KShs.B) (M) (KShs.M ) OUR CHANNEL 2,798 CONTRIBUTION 56.8 1,876 127 90 41.2 15 % 75 13.4 646 Growth in Total Mobile Loans Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Advanced MobiTransaction type(%) Q1 2020 Q1 2019 49.8B 45.4 42.1 40.6 35.6 43.2B 16.5 14.8 2.5 2.5 Q1 19 Q1 20 B2C B2B C2B LIPA KARO 18

V alueof Transactions No. of transactions Agency Revenue (KShs.M ) (KShs.B) (M) OUR CHANNEL CONTRIBUTION 124 12.9 104 93 AGENCY 10.8 66 64 7.8 49 94% Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 Growth in Agency Banking Agency Transaction type(%) Revenue Q1 20 Q119 37.8 36.8 29.2 27.4 19.2 15.1 16.4 14.7 1.7 1.3 0.1 0.1 CASH CASH SCHOOL BALANCE BILL OTHERS* DEPOSIT WITHDRAWAL FEES ENQUIRY PAYMENT *Others: Account opening, mini statement, load cards and Funds transfer 19

OUR CHANNEL CONTRIBUTION ATM Revenue No. of Transactions V alue of Transactions (KShs M) (KShs.B) (M) ATM 9% 126 120 117 38 Reduction in 36 number of ATM 3.7 transactions 3.4 21 3.3 Q1 18 Q1 19 Q1 20 Q1 18 Q1 20 Q1 18 Q1 19 Q1 20 Q1 19 20

OUR CHANNEL CONTRIBUTION POS Revenue (KShs. M) V alue of Transactions (KShs.B) MERCHANT / POS 6% 221 Growth in 204 202 average daily 12 transactions 11 per POS 10 Q1 18 Q1 19 Q1 20 Q1 18 Q1 19 Q1 20 21