for the year ended 30 June 2016 results presentation
RESULTS PRESENTATION 30 JUNE 2016 EPS and DPS continued to grow off a high base Cents 24.0% ROE 450 . +8% 400 407 379 350 331 300 +8% 274 250 226 226 200 210 174 150 136 100 102 50 0 2012 2013 2014 2015 2016 Diluted normalised earnings per share Dividend per share p 01
FIRSTRAND GROUP Introduction continued Strong economic profit generation despite impact of higher cost of equity NIACC * (R million) ROE and COE 24.7% 24.2% 24.0% 24.0% 12 000 25% 22.7% 20.7% 10 000 20% 9 694 9 706 9 086 8 000 8 172 15% 13.6% 14.5% 6 000 13.8% 13.6% 13.6% 13.5% 6 169 10% 4 000 4 163 5% 2 000 0 0% 2012 2013 2014 2015 2016 based 2016 based on old COE on new COE NIACC ROE Cost of equity (COE) * Net income after capital charge. Striking the appropriate balance between risk, return and growth Credit origination/pricing vs ROE preservation Short-term ‘g’ vs Long-term ‘g’ Risk off Less volatile, more sustainable earnings Long-term growth and diversification Investing Anchored to NIACC-positive earnings growth p 02
RESULTS PRESENTATION 30 JUNE 2016 FirstRand’s portfolio represents good opportunities for growth REVENUE SPLIT BY ACTIVITY * GEOGRAPHIC PBT MIX # Other Other markets (incl. UK and India) Insure Rest of Africa Save and 4% invest ** 10% Transact Lend South Africa 86% Transact and lend = 81% SOUTH AFRICA REST OF AFRICA • • Strategy delivering Lending and transactional still dominate – • have grown and protected these franchises Build in-country franchises a priority • Broaden financial services offering – OTHER MARKETS (UK AND INDIA) starting to see traction • Protect counterparty status and access to hard currency funding • Diversification (grow MotoNovo business) * Based on gross revenue, excluding consolidation adjustments. ** Includes private equity, deposit taking and investment management. # Based on PBT (incl. GTSY), excluding FCC, FirstRand company, consolidation adjustments and NCNR preference dividend. Operating franchises performed well FRANCHISE SPLIT OF NORMALISED EARNINGS * NORMALISED EARNINGS (R million) 2016 2015 % change 17% 8 FNB 12 282 11 385 9 RMB 6 287 5 758 55% 28% 22 WesBank 3 941 3 221 FNB RMB WesBank ROE: 38.6% 25.2% 21.8% * Excludes FCC (incl. Group Treasury), FirstRand company, consolidation adjustments and NCNR preference dividend. p 03
REVIEW OF OPERATIONS FNB FNB performance reflects success of consistent strategy NORMALISED PBT (R million) 38.6% ROE 20 000 . +8% 18 000 17 864 16 000 16 536 14 000 14 240 12 000 11 644 10 000 9 668 8 000 6 000 4 000 2 000 0 2012 2013 2014 2015 2016 Years prior to 2015 have not been restated for refined rest of Africa segmentation. Years prior to 2014 have not been restated for allocation of FCC costs and return on capital. p 04
RESULTS PRESENTATION 30 JUNE 2016 Domestic franchise performed well in tough environment NORMALISED PBT (R million) 12 000 +8% 10 000 8 000 +17% 6 000 4 000 (20%) 2 000 0 Retail Commercial Rest of Africa 2015 2016 Transactional franchise very resilient Strong growth driven by: NORMALISED PBT (R million) • Good customer growth: +4% in Consumer, +10% in Premium, 12 000 +17% +14% in Commercial • Strong volume growth and continued e-migration 10 000 • Cross-sell and up-sell – overdrafts and credit cards 8 000 • Endowment benefit Achieved despite: 6 000 • Interchange impact and higher cost of rewards 4 000 • Some new business strain impacting bad debts 2 000 0 (2 000) Transactional Term lending Save and invest Insurance Rest of Africa Other 2015 2016 Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. Insurance includes embedded credit protection. p 05
REVIEW OF OPERATIONS FNB continued Term lending performance reflects credit cycle NORMALISED PBT (R million) • Maintained conservative approach to mortgage lending • Normalisation of mortgages bad debt charge 12 000 • Cross-selling lending products to existing commercial customers 10 000 • Strong growth in personal loans to own customer base, however, moderated in second half 8 000 • As expected, new business strain emerging in personal loans, 6 000 but within appetite (7%) • Post write-off recoveries remain strong across all portfolios 4 000 2 000 0 (2 000) Transactional Term lending Save and invest Insurance Rest of Africa Other 2015 2016 Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. Insurance includes embedded credit protection. Save and invest strategy starting to deliver NORMALISED PBT (R million) • Strong penetration of new savings products 12 000 in Retail and Commercial segments • Cross-sell and up-sell 10 000 • Leveraging digital channels 8 000 • Market share gains in retail deposits 6 000 4 000 2 000 +25% 0 (2 000) Transactional Term lending Save and invest Insurance Rest of Africa Other 2015 2016 Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. Insurance includes embedded credit protection. p 06
RESULTS PRESENTATION 30 JUNE 2016 Good traction in insurance despite ongoing platform investment costs • Good traction in funeral policies, especially in Consumer NORMALISED PBT (R million) • Policy sales doubled during the year 12 000 • Strong growth in annualised premium income • Pre-emptive reduction in credit-related insurance premiums 10 000 • Over 1.6 million policies in issue • Significant lift in claims paid out 8 000 • Strong new product pipeline 6 000 • Ongoing cross-sell into existing base • Investment cost (new licence and business operations) 4 000 (5%) 2 000 0 (2 000) Transactional Term lending Save and invest Insurance Rest of Africa Other 2015 2016 Transactional includes transactional deposit products and deposit endowment, overdrafts and credit cards. Insurance includes embedded credit protection. Rest of Africa – tough macros and investment costs offset good performance from mature businesses Mature subsidiaries NORMALISED PBT (R million) • Outperformed local peers 2 500 • Return profile preserved +3% • Increase in impairments reflects macros 2 000 2 000 1 948 Emerging and start-up subsidiaries 1 500 • Zambia and Mozambique macros 1 000 extremely difficult • Impact of bad debts in sub-scale businesses 500 • Asset growth constrained >100% • Higher cost growth 0 ( 5) ( 354) • Expanded footprint ( 500) • Launch of Ghana Mature Emerging and subsidiaries start-up subsidiaries 2015 2016 p 07
REVIEW OF OPERATIONS RMB Diversified portfolio delivers sustainable growth and strong returns NORMALISED PBT (R million) 10 000 25.2% ROE . +10% 8 918 8 000 8 136 7 688 6 000 6 150 4 936 4 000 2 000 0 2012 2013 2014 2015 2016 Years prior to 2015 have not been restated for refined rest of Africa segmentation. Years prior to 2014 have not been restated for allocation of FCC costs and return on capital. p 08
RESULTS PRESENTATION 30 JUNE 2016 Balanced performance from an integrated, client-focused portfolio NORMALISED PBT * (R million) 4 000 +17% 3 000 +11% +17% 2 000 (5%) 1 000 +23% 0 Investment banking Corporate and Markets and Investing Investment and advisory (IB&A) transactional banking structuring (M&S) management (C&TB) INVESTMENT CLIENT = 68% INVESTING = 30% MANAGEMENT = 2% 2015 2016 * Excludes RMB Resources, legacy and head office portfolios. Market-leading origination franchise underpinned strong IB&A performance • Significant fee income on the back of heightened M&A and structuring activity NORMALISED PBT * (R million) • Deliberate strategy to balance risk/reward trade-offs in financial resource allocation 4 000 • Margin compression due to targeted origination of HQLA assets +17% • Strengthened portfolio coverage ratios 3 000 2 000 1 000 0 Investment banking Corporate and Markets and Investing Investment and advisory (IB&A) transactional banking structuring (M&S) management (C&TB) INVESTMENT CLIENT = 68% INVESTING = 30% MANAGEMENT = 2% 2015 2016 * Excludes RMB Resources, legacy and head office portfolios. p 09
Recommend
More recommend
