STANDARD BANK GROUP SBG SECURITIES AFRICA INVESTOR CONFERENCE - 22 June 2021 - The Vault
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STANDARD BANK
GROUP
SBG SECURITIES AFRICA
INVESTOR CONFERENCE
22 June 2021
1
SBG strategic priorities
Our purpose:
Why we exist Africa is our home, we drive her growth
Our strategic
priorities:
Transform client Execute with Drive sustainable
What we need to do to
deliver our purpose
experience excellence growth and value
2
KEY MACRO
TRENDS
3Interest rates
Average interest rates lower 4M21 vs 4M20
South Africa and International South and Central
10 15
8
10
6
4
5
2
0 0
Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21
% SA US1 % Mozambique Zambia Namibia Botswana Mauritius
East Africa West Africa
10 20
8 15
6
10
4
5
2
0 0
Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21
% % Angola Ghana Nigeria
Uganda Kenya
1 Represents the US Federal Funds Target Rate
Source: Bloomberg
4Currencies
On average, ZAR stronger 4M21 vs 4M20
South Africa and International South and Central
140 160
130 150
140 152.3
120 130
103.4
110 120
110
100 100 90.2
90 90
80
80 70
Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21
% USD/ZAR % ZAR/ZMW ZAR/MZN
East Africa West Africa
110 140 130.8
102.8
100 120 108.7
90 100
94.1
97.9
80 80
70 60
Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21 Jan 20 Mar 20 Apr 20 Jun 20 Aug 20 Oct 20 Dec 20 Feb 21 Apr 21
% ZAR/KES ZAR/UGX % ZAR/NGN ZAR/GHS ZAR/AOA
Source: Bloomberg, rates have been rebased to reflect movement since 1 January 2020
5KEY BANKING &
INSURANCE
TRENDS
6South Africa – Consumer disbursement trends
Mortgage disbursements (Rm) VAF1 disbursements (Rm) Personal lending disbursements (Rm)
>80%2 >35%2
1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21
1 Vehicle and asset finance for Consumer & High Net Worth Segment
2 1Q21 vs 1Q20
2020 Lockdown
7South Africa - Business & Corporate trends
Business lending2 (Rm) Investment Banking origination (Rm) Corporate TPS deposits (Rm)
>40%1 >10%1
1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21
1 1Q21 vs 1Q20
2 Business lending excluding the SME Government Guarantee Covid Loans
2020 Lockdown
8Africa Regions – Balance Sheet trends
Personal lending disbursements (‘000) Investment Banking origination (Rm) Corporate TPS deposits (Rm)
>20%1 >40%1 >10%1
1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21
Physical channel Digital channels
1 1Q21 vs 1Q20
2020 Lockdown
9South Africa - Insurance trends1
Key volume stats Gross written premium (1Q21, R2.2bn) Claims (1Q21, R0.8bn)
>10% >40%
Sales volumes
grew >40%2
>20% >100%
Cancellations
declined >5%2
>15%
>40%
Policy base
grew >5%2
>5% >15%
Claims volumes
grew >30%2
1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 1Q21
Short-term Credit Life Funeral Short-term Credit Life Funeral
1 Excluding Liberty
2 1Q21 vs 1Q20
10CAPITAL &
LIQUIDITY
11Robust Basel III capital and liquidity positions
Capital1 Capital adequacy1 Liquidity3
Net stable funding ratio
203
199
184 26 27
172
22 9 11 Basel III
13.9 14.0
154 20 8 minimum
147
17 6 13.5
13.5 13.3
123% 100%
20 7
4
13.2
164 165 Liquidity coverage ratio
146 154
123 130
SBG target ratio 10.0%-11.5%2
SARB minimum >7.0%2 Basel III
minimum4
141% 80%
Rbn Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Mar-21 % Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Mar-21
Tier 2 Tier 1 CET1
1 Including 3 As at 31 March 2021
unappropriated profits
2 Excluding 4 Based on temporarily revised SARB requirement
Pillar 2A buffer requirements
122021 MACRO
OUTLOOK
13South Africa macro-economic outlook
Recovery underway, inflation benign and interest rates expected to remain flat in 2021
Growth - Real GDP1, % Inflation - CPI (avg), % Interest rates - Repo rate (YE)2, %
SBG
Research 93% 97% 99%
relative to
2019 GDP SARB target range, 3-6%
Dec-19, 6.5%
4.6% 4.2%
2.1% 2.3% 4.4%
4.2%
3.3% 4.00%
3.50% 3.50%
SBG Research
-7.0% SARB
SARB (May-21) 3.3% 4.2% 4.4%
May 21
2020 2021 2022 2020 2021 2022 2020 2021 2022
Source: SBG Securities Research, SARB May-21
1 1Q21 GDP growth of 4.6% (QoQ seasonally adjusted and annualised), well above consensus of 3.2%; broad-based led by mining and assisted by uptick in consumer spending. Fixed investment was weaker than expected
2 SBG Research expects rates to increase 25bps in Jan-22 and May-22
14Africa Regions macro-economic outlook
Global tailwinds and Covid unwind positive
Global recovery and demand should support export demand GDP contribution, Goods vs Services
Covid unwind will spur growth
Inflation may tick up but unlikely to deter the generally
neutral stance on interest rates; Mozambique & Zambia Services
increased rates to year to date Goods
Growth rate expectations changed from Jan-21 to May-21
− The outlook for export economies have been upgraded
(Ghana, Nigeria, Angola, Botswana), while those of
West South & Central East
services economies have been moderated, especially
those reliant on travel & tourism (Tanzania & Mauritius) GDP growth outlook, 2021
− Higher oil prices expected to provide support to Nigeria & 6.0
5.3
Angola
3.7 3.7 4.0
Vaccine rollout has been sluggish; but expect it to gain Jan-21
momentum in 2H21 May-21 1.8
New waves & restrictions remain a risk; however
governments seem reluctant to go back to restrictions seen
in 2Q20 West South & Central East
Source: SBG Securities Research, African Markets Revealed May-21
15SBG 2021 OUTLOOK &
4M21 HIGHLIGHTS
16SBG 2021 outlook (11 March 2021)
Performance subject to the timing and pace of the recovery
Key drivers
Net interest margin Stabilise, at levels similar to 2H20
Cost growth Sub-inflationary target1
Credit loss ratio Below FY20 but remain above TTC2 range
Group HE growth Positive
ROE Higher than FY20
Dividend Higher than FY20
1 Based on weighted-average inflation across the group
2 Through-the-cycle range of 70 bps – 100 bps
17Highlights of 4M21 market update (31 May 2021)
Key 4M21 trends1 4M21 performance commentary1
Environment and outlook has improved Net interest
Declined mid-single digits, flat in CCY
income
Stronger ZAR dampened growth trends by 5%
Balance Sheet trends mixed Non-interest Declined high-single digits, fees grew
revenue mid-single digits in CCY
Low interest rates put strain on margins & interest
income Declined low- to mid-single digits,
Cost growth
Trading revenue lower vs high base in prior period increased low single digits in CCY
Customer transaction volumes improving Marginally below top end of TTC2 range;
Credit loss ratio
FY21 expected to be above top of TTC
Credit better than expected
ROE recovering ROE
Above FY20 (8.9%) but below COE
(14.4%)
Capital remains strong and expect to pay an interim
dividend Higher than FY20 (24%), but lower than
Dividend payout
Strategy update – 20 August historic payout levels (45%-55%)
1 Based on 4M21 vs 4M20
2 Through-the-cycle range of 70 bps – 100 bps
18Disclaimer – Forward-looking statements
The Group may, in this document, make certain statements that are not historical facts and relate to analyses and
other information which are based on forecasts of future results and estimates of amounts not yet determinable.
These statements may also relate to our future prospects, expectations, developments and business strategies.
Examples of such forward-looking statements include, but are not limited to, the impact of the COVID-19 pandemic on
Standard Bank Group’s business, results of operations, financial condition and liquidity and statements regarding the
effectiveness of any actions taken by the Group to address or limit any impact of COVID-19 on its business;
statements regarding exchange rate fluctuations, volume growth, increases in market share, cost reductions, and
business performance outlook.
By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific,
and there are risks that the predictions, forecasts, projections and other forward-looking statements will not be
achieved. If one or more of these risks materialise, or should underlying assumptions prove incorrect, our actual
results may differ materially from those anticipated. You should understand that a number of important factors could
cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in
such forward-looking statements.
19THANK YOU 20
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