Q12019 RESULTS OUR REGIONAL PRESENCE Branches 10 Ethiopia - PowerPoint PPT Presentation

Q12019 RESULTS

OUR REGIONAL PRESENCE Branches 10 Ethiopia South ATMs 2 Sudan Staff 138 (Representative Office) Agents 0 KShs. 119B Branches 15 Uganda ATMs 17 TOTAL EQUITY Staff 322 Branches 200 Agents 227 ATMs 369 Kenya 258 Staff 5,058 Branches 14 Agents 8,604 ATMs 25 Rwanda BRANCHES Staff 288 946 ATMS, Agents 270 Branches 14 16,642 AGENTS & ATMs 17 MERCHANTS T anzania Branches 5 Staff 292 ATMs 7 Burundi Agents 49 Staff 122 Agents 172 2

1Q19 1Q19 1Q19 Q1 2019 Customer Net Loans Profit 552,204 8,496 464,263 Deposits and Advances Before Tax 1Q18 1Q18 FINANCIAL 1Q18 (KShs. M) (KShs. M ) (KShs. M) 418,618 496,366 7,484 HIGHLIGHTS 1Q19 1Q19 1Q19 Market 18.0% 135,057 4,612 Staff costs Total debt / Capitalization 1Q18 1Q18 (KShs. M) Total equity 1Q18 (KShs. M ) 159,432 22.6% 4,452 1Q19 1Q19 1Q19 Non 21.9% 48.5% Return 38,824 Cost to Performing on Average Income 1Q18 Loans 1Q18 1Q18 Equity Ratio 19.5% (KShs. M) 49.1% 43,775 3

National Bank of Kenya (NBK) offer 2019 KENYA • Offer to acquire 100% of NBK HIGHLIGHTS • Documentation relating to the acquisition availed to shareholders as per regulatory standards Overview of the year to date Banking Industry: • Momentum for mergers & acquisitions • Increased regulatory oversight on compliance with Kenya’s Anti -Money Laundering and Combating the Financing of T errorism (AML/CFT) • Kenya Banking Sector Charter to come in force in June Economicdrivers: • Big Four – Housing Healthcare Manufacturing Food security • Resilient Kenya Shilling supported by record growth in diaspora remittances, tourism & horticulture 4

MACRO- ECONOMIC HIGHLIGHTS

MACRO- ECONOMIC HIGHLIGHTS Contribution to GDP 2018(%) 2018Growth (%) Kenya 21.30 11.40 8.80 9.64 8.36 7.58 6.87 6.3% 6.40 5.60 7.12 6.09 4.50 4.20 6.30 6.60 4.25 5.60 5.90 2.80 4.10 1.73 1.03 AGRICULTURE MANUFACTURING REAL TRADE EDUCATION TRANSPORT FINANCIAL& CONSTRUCTION ICT HEALTH MINING& & ESTATE STORAGE INSURANCE QUARRYING 2018 GDP Growth Rate( % ) 6

MACRO- ECONOMIC HIGHLIGHTS GDP Growth (%) Regional GDP Growth 8.0 7.2 6.7 6.1 2.8 5.7% South Sudan Ethiopia Rwanda Tanzania Uganda Burundi 2018P* -6.3 East Africa GDP Growth Rate ( % ) 7 *Source: AfDB, Africa Economic Outlook 2019

Inflation Evolution(%) Inflation Target Target Non Food MACRO- rate Upper Lower Fuel 7.50 ECONOMIC HIGHLIGHTS 4.35 4.83 Kenya 3.50 3.00 2.50 MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 8 2 0 1 8 2 0 1 8 2018 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2019 2019 Interest Rate Evolution(%) 13.65 13.49 13.22 12.78 12.61 12.47 10.00 9.50 9.00 8.02 8.00 7.97 7.73 7.67 7.64 7.63 7.56 7.36 7.34 7.19 7.02 7.08 MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 8 2 0 1 8 2 0 1 8 2018 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2019 2019 91- da ybill A vg.lendingrates CBRrate 8

USD/KES Exchange Rate(%) MACRO- 102.6 101.3 100.2 101.0 ECONOMIC 100.4 100.6 100.8 100.7 100.6 HIGHLIGHTS Currency Movement MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 8 2 0 1 8 2 0 1 8 2018 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2019 2019 Exchange Rates to USD 3,707 2,344 1,826 902 130 28 South Uganda Ethiopia Tanzania Burundi Rwanda Sudan 9

Current Account Balance (% ofGDP) MACRO- ECONOMIC HIGHLIGHTS -4.7 -5.1 -5.2 K enya -6.2 -6.7 -10.4 Q1 2019 2014 2015 2016 2017 2018 12 Month Private Sector CreditGrowth 4.3% 4.3% 4.4% 3.8% 3.4% 3.9% 2.8% 3.0% 3.0% 2.4% 2.0% MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR 2 0 1 8 2 0 1 8 2 0 1 8 2018 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 8 2 0 1 9 2019 2019 10

CHANNEL PERFORMANCE

March2018 OUR CHANNEL AGENCY, BRANCH ATMS MOBILE INTERNET TELLER CONTRIBUTION 42% 12% AND POS 14% 32% 91% of March2019 transactions performed AGENCY, BRANCH ATMS outside the INTERNET MOBILE TELLER 56% AND POS 8% 9% 27% branch 12% decrease in average transactions 12% decrease in Number of branch / tellerper day transactions. 137% Mar 2018 Mar 2018 80.0 4.5 growth in Mar 2019 70.3 Mar 2019 4.0 non-branch revenue to A vg. Transactions / T eller perday Number of Branch Transactions( M ) over 3.2B 12

V alueof Transactions No. of transactions Mobile Revenue OUR (KShs.B) (M) (KShs.M ) CHANNEL CONTRIBUTION 1,692 90 26.0 75 270% 646 13.4 55.1 9.6 Growth in Mobile Loans 1Q 17 1Q18 1Q19 1Q18 1Q19 1Q 17 1Q18 1Q19 Advanced MobileTransaction type(%) 1Q 2018 1Q 2019 33.8B 48.1 48.1 32.5 32.5 17.3 17.3 9.2B 2.1 2.1 1Q 18 1Q 19 B2C B2B C2B LIPA KARO 13

Agent revenue No. of transactions V alueof Transactions OUR (KShs M) (M) (KShs.B) CHANNEL CONTRIBUTION 66 104 49 75 10.8 64 35% 7.8 25 4.6 Growth in Agency Banking 1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19 1Q 17 1Q18 1Q19 Volumes Agency Transaction type(%) 1Q 2018 1Q 2019 60.4 37.8 29.2 16.4 15.0 14.9 14.7 8.1 1.7 0.9 0.7 0.1 CASH CASH SCHOOL BALANCE BILL OTHERS DEPOSIT WITHDRAWAL FEES ENQUIRY PAYMENT 14 *Others: Account opening, mini statement, load cards and Funds transfer

OUR ATM revenue V alue of Transactions No. of transactions (KShs.B) CHANNEL (M) (KShs M) CONTRIBUTION 2% Growth in ATM Volumes 126 120 130 95 86 12 3.7 3.7 3.4 1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19 1Q 17 1Q 18 1Q 19 15

OUR V alue of Transactions (KShs.B) POS Revenue (KShs. M) CHANNEL CONTRIBUTION 232 17% 221 reduction in 202 the average value of Merchant/ POS 12 transactions 10 11.2 1Q 18 1Q 19 1Q 19 1Q 17 1Q 17 1Q 18 16

OUR FINANCIAL PERFORMANCE TO DATE

BALANCE Govt. Securities SHEET HIGHLIGHTS KShs 133.3B KShs 112.1B 12% Total Net Loans & Advances Assets growth KShs 464.3B KShs 418.6B Customer Deposits KShs 552.2B KShs 496.4B Total Assets KShs 725.6B KShs 647.5B 18 1Q18 1Q19

Sectoral Loans Comparison Industry Sept 2018 KCB Mar 19 LOAN Mining and Quarrying 0.4% 0.0% BOOK 3.7% 3.0% Agriculture PERFORMANCE 4.7% 3.0% Energy and water Tourism, restaurants and hotels 2.6% 4.0% 11% Transport and communication 6.8% 5.0% Financial Services 3.6% 5.0% Growth in Trade 18.9% 7.0% Net Loans Building and construction 4.8% 6.0% and Manufacturing 13.0% 12.0% Advances Real estate 15.5% 19.0% 36.0% Personal/Household 26.0% * Group gross loans KShs.B 3 18 503 20 19% LCY FCY 462 81% Mar-18 Retail Corporate Mortgage Mar-19 19

Asset Quality Review 12.8% LOAN 11.8% BOOK 11% 9.5% PERFORMANCE 8.5% 9.8% 7.7% 89% 7.8% 7.9% 7.7% Asset quality improvement 1.6% 1.0% 1.0% 0.6% LCY FCY Q1 2016 Q1 2017 Q1 2018 Q1 2019 Industry NPL (Kenya) NPL Breakdown 16.3% 15.6% 14.8% 10.5% 9.5% 7.4% 3.4% 3.2% CHECK OFF MORTGAGE CORPORATE SME & MICRO Q1 2018 Q2 2018 FY 2018 Q1 2019 20

Improved IFRS Coverage LOAN 50,000 120.0% BOOK 43,775 PERFORMANCE 38,824 40,000 11% 32,151 Decrease in 90.0% stock of Non- 30,000 Performing 79.6% Loans 62.9% 63.9% 20,000 60.0% 61.0% 60.8% 10,000 43.3% - 30.0% 1Q17 1Q18 1Q19 Gross NPL Central Bank Coverage Ratio IFRS Coverage Ratio 21

Customer deposits segmentation 1% 2% 2% BALANCED FUNDING 48% 48% 48% STRUCTURE 51% 50% 50% 1Q17 1Q18 1Q19 Corporate Retail Other Currency Mix Customer deposits mix 1Q18 Customer deposits mix 1Q19 6% 8% 12% 24% 24% 62% 64% 6% 6% 88% LCY FCY 22 Demand Savings Term Call

T otal Capital to RWA Core Capital to RWA Group Group STRONG 20.0% 18.6% 17.0% CAPITAL 15.3% 15.1% BUFFERS 14.1% 14.5% 14.5% 14.5% 10.5% 10.5% 10.5% 1Q17 1Q18 1Q19 1Q17 1Q18 1Q19 Kenya Kenya 17.7% 18.7% 15.0% 14.5% 14.5% 14.5% 16.4% 15.0% 14.1% 10.5% 10.5% 10.5% 1Q17 1Q18 1Q19 1Q17 1Q18 1Q19 23

P&L Net interest income HIGHLIGHTS KShs 12.7B KShs 11.4B Total non Profit Interest Income before KShs 6.0B tax KShs 5.5B Up 14% Operating Expenses (excl. Provisions) KShs (9.1B) KShs (8.9B) 11% Profit before tax earnings growth to KShs 8.5B KShs 7.5B KShs 5.8B 24 1Q18 1Q19

KShs. M Net Loans & Advances PBT International Businesses (127%) 115 703 KCB Bank 352 South highlights (425) Sudan 2,672 43% KCB Bank 13% 1,305 73 51 Burundi growth in Net Loans and 6,498 (382%) KCB Bank 6,192 49 Advances Uganda (138) (27%) 13,491 142 KCB Bank 103 12,986 Rwanda 224 38% 16,373 162 13,603 KCB Bank Tanzania 1Q19 1Q18 25