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Full Year Financial Results 2011 26 March 2012

Full Year Financial Results 2011 26 March 2012. Agenda. Highlights. Economic overview. Financial review. Operational overview. Strategy and outlook. Highlights. DOUGLAS MUNATSI. PAT. RoE. Cost to Income. EPS. Financial Highlights. 2010 16.2%. 2011 BWP87.7m. 2010 BWP68.6m. 2010

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Full Year Financial Results 2011 26 March 2012

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  1. Full Year Financial Results201126 March 2012

  2. Agenda • Highlights • Economic overview • Financial review • Operational overview • Strategy and outlook

  3. Highlights DOUGLAS MUNATSI

  4. PAT • RoE • Cost to Income • EPS Financial Highlights • 2010 • 16.2% • 2011 • BWP87.7m • 2010 • BWP68.6m • 2010 • 46.3 thebe • 2010 • 77% • 2011 • 16.3% • 2011 • 74% • 2011 • 56.6 thebe • Profits dragged down by high impairment charge which increased from BWP15.8m in 2010 to BWP79.5m in 2011 & impact of IFC convertible loan of BWP35m • Up by 28% • Flat • 3 points • down • Up by 22% • Net asset value per share up from BWP2.88 to BWP3.99 4

  5. Attributable Profits (BWPm) • Dividend Per Share (Thebe) • NAV Per (BWP) Financial Highlights • 2011 • BWP83m • 2010 • BWP66.7m • 2010 • 10% • 2010 • 2.93 • 2011 • 17.5% • 2011 • 3.99 • Up by 24% • Up by 39% • Up by 36% • Net asset value per share up from BWP2.88 to BWP3.99 5

  6. Deposits • Equity • Total Assets Financial Highlights • Loans & Advances 2011 BWP9,2 billion • 2011 • BWP6,1 billion 2011 BWP7,4 billion • 2011 • BWP613 million 2010 BWP6,0 billion • 2010 • BWP3,1 billion 2010 BWP4,9 billion • 2010 • BWP438 million • Up 53% • Up 50% • Up 40% Up 97% 6

  7. Operational highlights 7

  8. Economic review DOUG MUNATSI

  9. Economic Overview Derailment of global recovery appears to have been averted for now Europe adopted a tight fiscal stance & measures to reduce financial stress Euro area is expected to enter into a mild recession in 2012 A stronger performance in emerging markets though growth revised downwards US economic activity turning better than initially expected 9

  10. Economic Overview Sub-Saharan Africa (SSA) continuing its post-crisis recovery SSA region grew by 4.9% in 2011 expected to grow by 5.5% in 2012 Commodity based countries remain vulnerable to any global downturn 10

  11. GDP Ranking as of 2012 – Top 15 Economies US China Japan Germany France Brazil UK New Global Order Italy ü China overtook Japan Russia in 2010 China a leading ü India commodities consumer of Canada Brazil to overtake UK ü Spain in 2012 Australia Korea US$ bn Mexico 0 4,000 8,000 12,000 16,000 11

  12. GDP Ranking as of 2012 Top 15 African Economies 12

  13. GDP Growth (%) & Size (US$ bn) 13

  14. 2011 Inflation Development Inflation peaked in a number of countries during 2011 Price pressures from volatile and high fuel & food prices 14

  15. Policy Interest Rates Policy interest rates – key monetary policy tools to fight inflation Bots Bank rate remained flat at 9.5% Moz policy rate was lowered by 150bs in line with declining inflation In TZ, firming up of overnight rate in H2 was due to tight liquidity conditions In ZM, bank rate averaged 8.8% in 2011 compared to 6.5% in 2010 15

  16. Exchange Rate Movement vs. USD Concerns on the pace of global recovery triggered ZAR weakness in H2 of 2011 Having appreciated in 2010, ZAR & BWP depreciated vs. US$ by 24% & 17%, respectively MZN appreciated vs. USD by 18%. MZN was being used as a tool to fight inflation 16

  17. Exchange Rate Movement per Pula Due to dominant weight of ZAR in the Pula basket of currencies, the BWP mirrors the ZAR movement • The following currencies appreciated vs BWP: • MZN (29.4%) • ZMK (8.7%) • TZS (7.9%) 17

  18. ABC Markets – Banking Sector Landscape (US$m) 18

  19. Financial review BEKI MOYO

  20. Income Statement Performance driven by increase in net interest income and non-interest income Impairment high due to loan growth and downgrade in Tanzania & Zimbabwe Operating expenses higher in line with expansion 20

  21. Income Statement Performance driven by increase in net interest income and non-interest income Impairment high due to loan growth and downgrade in Tanzania & Zimbabwe Operating expenses higher in line with expansion 21

  22. Attributable Profit Trend Higher attributable profits driven by increase in core earnings Upward trend in past 3 years supported by sustainable earnings BWP’ million ROE flat due to lower earnings in Tanzania Dip in 2009 due to dollarization & change in business model 22

  23. Income Statement- Segmental Analysis Botswana and Mozambique post solid results on back of improved NII Zimbabwe continued to perform well in all segments Zambia performance buoyed by Microfinance Tanzania affected by downgrade of security on NPL 23

  24. Income Statement – Segmental Analysis Doubled retail income during the year 24

  25. Income Statement- Segmental Analysis 25

  26. Income Statement – Segmental Analysis

  27. Income Statement – Net Interest Income • Positive trend in net interest income driven by better liquidity and increased balance sheet size • Slight reduction in net interest margins due to reduction in interest rates on consumer lending in Zambia 27

  28. Income Statement- Net Interest Income (USD) 28

  29. Income Statement- Non-interest income The reduction is due to the impact of IFC convertible loan BWP35 m 29

  30. Income Statement- Non-interest income 30

  31. Operating Expense per Entity BWP’000 Increase in opex due to expansion in Retail & SME Banking 31

  32. Income Statement- Cost to Income Cost to income ratio peaked in 2009 due to change in business model and dollarization in Zimbabwe. 32

  33. Income Statement- Opex per entity 66% 12% 33

  34. Balance Sheet Overview 34

  35. Balance Sheet 35

  36. Balance Sheet- USD 36

  37. Balance Sheet- Loans and Deposits 97% increase in loans 49% CAGR 50% increase in deposits 39% CAGR 37

  38. Deposits Per Entity Strong growth in deposits across all entities 38

  39. Balance Sheet – Segmental Analysis Retail contribution has significantly increased in the last 12 months 39

  40. Balance Sheet- Asset Quality 40

  41. Balance Sheet – Segmental Analysis Retail contributed 8.3% of total deposits (Dec 2010: 3.4%) 41

  42. Balance Sheet – Capital Adequacy • There is now need to raise additional capital 42

  43. Operational Overview FRANCIS DZANYA

  44. Loans 277 102 76 73 218 2,100 2,755 3,603 3,576 4,584 Deposits 265 328 63 162 140 3,786 3,100 4,478 6,750 5,771 Assets 383 371 196 156 108 4,428 6,398 5,409 9,642 7,380 Mozambique Zimbabwe Zambia Tanzania Our Footprint – Banking Sector Landscape (US$m) BancABC Share Botswana 44

  45. Botswana Highlights 45

  46. Botswana Branches 46

  47. Mozambique Highlights 47

  48. Mozambique Branches 48

  49. Tanzania Highlights 49

  50. Tanzania Branches 50

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