Chris Newson, Contents

Transcription

Chris Newson,
Chief executive officer
Stanbic IBTC Bank PLC
Contents
o Brief history
o Group structure
o Governance and risk management framework
o Comparative market analysis
o Strategy overview
o Financial performance
o Conclusion
C
l i
o Questions
2
1
Brief history
3
o
The Standard Bank Group (SBG) merged its Nigerian operations, Stanbic Bank
Nigeria (SBN) with that of IBTC Chartered Bank PLC (IBTC) on 24 September 2007
o
The merger,
merger by way of the first ever tender offer in Nigeria and a $525 million FDI
FDI,
the largest in Nigerian financial history, gave birth to a new entity now known as
Stanbic IBTC Bank PLC (SIBTC)
o
SBN was created in 1992 when SBG acquired ANZ Grindlays’ operations in
Botswana, Ghana, Kenya, Nigeria, Uganda, Zaire, Zambia and Zimbabwe. SBN
offered merchant banking services
o
IBTC was established 20 years ago to offer investment banking and investment
management services
o
IBTC merged with Chartered Bank and Regent Bank in 2005 and was thereafter
known as IBTC Chartered Bank PLC - a universal bank
o
At the time of the merger with Stanbic Bank Nigeria, IBTC Chartered Bank PLC was
the leading investment bank in Nigeria
o
o
SIBTC is listed on the Nigerian Stock Exchange
SBG holds 50.7% of SIBTC listed stock, the remainder is widely held. SIBTC has
over
100 000 shareholders
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
4
2
SIBTC structure
G
Corporate &
Investment
Banking
Personal &
Business Banking
Wealth
O
V
E
Finance
B
u
s
i
n
e
s
s
Human resources
Information technology
R
N
Investor relations
Payment strategy
A
Project management
N
Credit
C
Risk & compliance
E
Internal audit
S
u
p
p
o
r
t
Marketing
Company secretarial & legal
5
SIBTC structure : product area
Board of
directors
Stanbic IBTC Bank Group
Chris Newson - CEO
Corporate & Investment
Banking
Sola David- Borha
Personal & Business
Banking
Business Support
Marna Roets
Jacques Troost
Global markets
Mortgage
lending
Investment
banking
Instalment sale
and finance
leases
Transactional
T
ti
l
products and
services
Wealth
Obi Abajue
Pension
management
Asset
management
Card products
Transactional
products
Bancassurance
6
3
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
7
Governance framework
Stanbic IBTC Board
Credit Committee
Remuneration Committee
(Remco)
Shareholders
Risk Management
g
Committee
A dit Committee
Audit
Executive Committee
Management Credit
Committee
Country Risk Committee
Risk Management
Committee
Asset and Liability
Committee (Alco)
Personal & Business
Banking Exco
Corporate & Investment
Banking Exco
Business Support Exco
Board committees
Statutory Committee
Information Technology &
Programme of works
Management Committees
8
4
Board of Directors
Atedo Peterside OON (53) (Chairman)
BSC MBA
Directorships: Stanbic IBTC Bank PLC, Stanbic IBTC Pension
Managers Limited, Stanbic IBTC Ventures Limited, Stanbic IBTC
Asset Management Limited, Nigerian Breweries Plc & Presco Plc
Ratan Mahtani (53)
Chris Newson*(44) (Chief executive officer)
Dr Christopher Kolade CON (76)
Directorships: Stanbic IBTC Bank PLC, Aegan Investments Limited,
Churchgate Nigeria Limited, First Century International Limited, Foco
International Investments Limited, T F Kuboye & Co, International
seafoods Limited
BA Dip. Ed
Directorships: Stanbic IBTC Bank PLC, Stanbic Equities Nigeria Directorships: Stanbic IBTC Bank PLC, Acorn Petroleum PLC, System
Limited, Stanbic Nominees Nigeria Limited, Stanbic, IBTC Asset Specs Nigeria Limited, Cornerstone Insurance Plc
Management Limited
B Com CA(SA)
Jacko Maree (53) (Chief executive officer: Standard Bank Group)
Sola David-Borha*(49) (Deputy chief executive officer)
B.Com MA (Oxford) PMD (Harvard)
BSC MBA
Directorships: Stanbic IBTC Bank PLC, Stanbic Nominees Directorships: Standard Bank Group, The Standard Bank of South
Nigeria Limited, Stanbic Equities Nigeria Limited, Stanbic IBTC Africa, Stanbic IBTC Bank PLC, Standard International Holding SA,
St d d Bank
B k Pl
Plc, Liberty
Lib t Group,
G
Lib t Holdings
Liberty
H ldi
Asset Management Limited, Stanbic IBTC Pension Managers Standard
Limited, Stanbic IBTC Ventures Limited, Board Member-Financial
Institutions Training Centre (FITC)
Ben Kruger (49) (Deputy chief executive: Standard Bank
Group)
Yinka Sanni*(43) (Executive Director: CIB)
B Com (Hons) CA(SA)
B.Agric (Agric Econs) MBA ACS
Directorships: Standard Bank Plc, Stanbic IBTC Bank PLC, SSA
Directorships: Stanbic IBTC Bank PLC, Stanbic IBTC Pension
Trading (Pty) Ltd
Managers Limited, Stanbic IBTC Asset Management Limited
9
* Executive director
Board of Directors
Sam Unuigbe (66)
Ifeoma Esiri (56)
BSC Econs, FCA (Eng. & Wales), FCA (Nig.), FCTI
Directorships: Stanbic IBTC Bank PLC, Phillips Project
Centre Limited, Delta Afrik, Delta Tek Engineering Limited,
Delta Terra Tek, WISco Nigeria Limited
LLB BL LLM
Directorships: Stanbic IBTC Bank PLC, Stanbic IBTC Asset
Management Limited, Podini International Limited, Veritas Geophysical
g
Limited,, Ashbert Leisures Limited,, Ashbert Beverages
g Limited,,
Nigeria
Ashbert Oil & Gas Limited
Lft. Gen. (rtd) M. Wushishi CFR GCON (69)
Marna Roets*(42) (Chief operating officer)
B Com (Hons) CA(SA)
Directorships: Stanbic IBTC Bank PLC, Stanbic Nominee Nigeria
Limited, Stanbic Equities Nigeria Limited
Directorships: Stanbic IBTC Bank PLC, UAC of Nigeria Plc,
UACN Property Development Company Plc, Automotive
Components Industries Limited, Acorn Petroleum Plc,
Umfat Holdings Limited
Dr Alewyn Burger (57) (Chief operating officer:
Standard Bank Africa)
MSc PhD AEP AMP (Harvard)
Directorship: Stanbic IBTC Bank PLC, Integrated Process
Solutions, MTN Banking
Bhagwan Mahtani (55)
Directorships: Stanbic IBTC Bank PLC, Aegan Investments Limited,
Churchgate Nigeria Limited, First Century International Limited, Foco
International Investments Limited, T F Kuboye & Co, International
seafoods Limited
10
5
Board of Directors
Ahmed Dasuki (50)
Msc Architecture
Directorships: Stanbic IBTC Bank PLC, MTN Nigeria
Comm. Ltd, Phillips Projects Centre, Tinapa Business
Resorts Limited, SASPV Limited, Islama Financial &
Investment Trust, Interglobal Limited, Celtelcom Investment
Limited
Moses Adedoyin (60)
Directorship: Stanbic IBTC Bank PLC
Jacques Troost *(45) (Executive director: PBB)
B.Com (Hons)
Directorship: Stanbic IBTC Bank PLC
11
Risk management: governance process
o Critical to the integrity of risk management
o Approves standards and policies
o Challenges risk management processes
o Monitors performance and reporting
o Comprises
– Executive risk management committees
– Executive committee
– Risk management sub-committees of the board
o Places reliance on the cascading of authority downwards and the
escalation of material issues upwards
o Provides comfort to regulators
12
6
Risk management: standards and policies
o Based on the Standard Bank Group risk standards and policies
o Based on best practice
o Compliant with IFRS requirements
o Considerate of appropriate regulatory input by
CBN, SARB and FSA
(UK)
o Modified to give appropriate consideration to Nigerian conditions
13
Key management: group executive committee
Chris Newson (44) Chief executive officer
• B Com, CA (SA), CSEP
Sola David-Borha (49) Executive director: Corporate & Investment
Banking
• B.Sc, MBA
Jacques Troost (45) Executive Director: Personal & Business Banking
• B.Com Hons
Yinka Sanni (43) Head: CIB Transactional products and services
• MBA
Obi i Ab
Obinnia
Abajue
j (33) H
Head:
d W
Wealth
lth G
Group
• B.Sc Actuarial Science, MBA
Olukayode Solola (41) Head: Global Markets
• MBA, ACA
14
7
Key management: group executive committee
Dr Demola Sogunle (44) Head: Group risk
• B.Sc, M.Sc, PhD
Marna Roets (42) Executive director: Business support
• B Com, CA (SA)
Ronald S Pfende (37) Chief financial officer
• B Com, MBL, CA(SA), CA(Z)
Angela Omo-Dare (49) Company secretary and Head: Legal
• LLB, BL, LLM
I i
Isioma
O
Ogodazi
d i (51) Head:
H d Human
H
resources
BA, Dip Personnel Management, IPM
Kasongo Kandolo, Head: Credit
MBA
15
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
16
8
Comparative analysis – shareholders funds (Nbn’s)
250
200
150
100
50
0
Source : Agusto & Co Banking Industry Report 2007 covering financial year ends up to
30 September 2007 and for Stanbic IBTC Bank as at 31 December 2007
17
Comparative analysis – total assets (Nbn’s)
1 600
1 400
1 200
1 000
800
600
400
200
18
9
Comparative analysis – post-tax return on equity
30%
25%
20%
15%
10%
5%
0%
19
Comparative analysis – post-tax return on assets
6%
5%
4%
3%
2%
1%
0%
20
10
Comparative analysis – cost-to-income ratio
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
21
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
22
11
Strategy overview
o Balanced contribution from our 3 business units
o Focus on quality business relationships without compromising overall return to
shareholders
o Extend branch footprint and focus on self service channel optimisation
o Leverage our market leader position within the wealth segment, stock broking, corporate
finance, custody and project finance
o Leverage off the knowledge capabilities and footprint of the Standard Bank Group
o Ensure lending margins appropriately priced to reflect increasing risk
o Continued investment in upgrading and expanding the overall infrastructure and IT
systems to build a base for sustainable and future growth
o Human resources – implement world class people management practices
o Continue to build the Stanbic IBTC brand to be synonymous with excellent service and
reliability
23
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
24
12
Financial statistics for nine months ended 30 Sep 2008
2008
change %
10 575
82
5 797
56
82
31
NAVPS (kobo)
430
77
242
ROE (%)
17.6
0
17.6
Credit loss ratio (%)
2.49
(30)
3.55
50.09
15
43.68
Profit after tax (Nm)
Earnings per share (kobo)
Cost-to-income ratio (%)
Total Assets ((Nm))
2007¹
436 282
52
286 488
Loans and advances (Nm)
96 473
15
83 962
Deposits and current accounts (Nm)
96 104
24
77 636
¹SIBTC changed its accounting year to 31 December from 31 March with effect from the 2007 year
end. To allow for effective comparison the 2007 financial results shown above, where applicable,
were arrived at by summing the published results for the 6 month period ended 31 December 2007
with IBTCs published results for the quarter ended 31st March 2007.
25
Financial statistics for nine months ended 30 Sep 2008
2008
Margin lending (Nm)
11 159
N performing
Non
f
i lloans (N
(Nm))
13 183
Provision adequacy (%)
Funds under management (Nbn)
Capital adequacy (%)
Liquid asset ratio (%)
change %
2007
(61)
28 326
43
9 202
53.7
(54)
117.9
296.5
64
180.4
27.4
(19)
33.9
60.3
(24)
79.2
26
13
Revenue contribution by business unit
21%
51%
28%
CIB
PBB
Wealth
For the nine months ended 30 Sep 2008
27
Contents
o Brief history
o SIBTC structure
o Strategy overview
o Conclusion
C
l i
o Questions
28
14
Impact of global financial crisis
o SIBTC is well capitalised with a high level of liquidity
o Relatively small exposure to the capital market
o Limited impact on corporate default rate
o Adverse revenue impact on business units whose revenue is derived
from capital markets
–
Partly offset through developing new markets, new products and
i
increasing
i our market
k t share
h
–
Universal banking model also means that other areas of the
group continue to grow and cushion this negative revenue impact
29
Conclusion
o Diversified financial services group offering a full suite of financial
services to all market segments
o SIBTC is well capitalised
o Strong liquidity position
o Limited exposure to margin lending and capital markets
o Have ability and capacity to continue writing quality business
o Global financial turmoil set to continue
o Much tougher operating environment
o Continue to pursue our growth strategy from a position of strength
30
15
Questions
16
Michael Hugman,
Emerging market strategist
Nigeria – assessing the potential of Africa’s giant
Overview
o Nigeria: the underlying investment story
– Hydrocarbon potential
– Strong sovereign balance sheet
– Policy reforms
o Coping with the current oil price shock
– Fiscal policy and debt
– FX reserves
– Inflation
– Growth
o Future risks and rewards
– Staying steady through 2009
– Achieving Nigeria’s potential as a key emerging market
2
1
The underlying investment story
Hydrocarbon potential
o
Figure 1: Oil and gas galore
boe m /y
Nigeria remains one of the
worlds most exciting
hydrocarbons prospects
5,600
4,200
– 70bn boe known
reserves
2,800
– Further 38bn boe
potential
o
1,400
The potential for this asset
wealth to combine with strong
population growth remains
enormous
0
2008 2014 2020 2026 2032 2038 2044 2050
Know n and probable reserves
Know n reserves
Sources: BP, IEA, EIA, Standard CIB Global Research
3
Exceptionally strong balance
sheet
o
o
Progress in the early 2000s
was hampered by a debt
overhang which constrained
trade and credit
Harnessing oil windfall
savings, Nigeria has
transformed its sovereign
balance sheet,
sheet significantly
outperforming its BB peer
group and even investment
grade oil credits
Figure 2: No debt to worry about
%
80
60
40
20
0
Nigeria
Russia
Gabon
Kazakhstan BB peer
group
External debt/GDP (%)
Sources: Country authorities, Fitch, Standard CIB Global Resear
4
2
Structural reforms key to unlocking opportunities
o
Financing development
–
–
–
–
o
Bank consolidation
Debt capital markets
Equity capital markets
Supporting growth via the public sector
–
–
–
o
Pension reforms
Critical fiscal policy reforms to increase stability
Privatisation
Deregulation e.g. telecoms sector
Reforms to address infrastructure investment only just beginning to deliver
5
Coping with the current oil shock
Fiscal Deficit
o
Historically,
y, higher
g
oil p
prices
were paradoxically
accompanied by rising deficits
Figure 3
% GDP
15.00
7.50
as spending grew more quickly
than revenue in anticipation of
future funds
o
0.00
-7.50
Wide-ranging
g g fiscal reforms
allowed large surpluses to be
run in this cycle, creating
-15.00
Yr 1
Yr 2
Yr 3
Yr 4
Average - past cycles
Yr 5
Yr 6
Yr 7
2003-2009
space for a moderate deficit
this year to smooth spending
Sources: IMF, Country authorities, Standard CIB Global Resea
6
3
External debt
o
o
o
In the past, higher oil
revenues provided access
to international borrowing,
leaving substantial debt as
oil booms faded
This time around, fiscal
surpluses funded a groundbreaking debt buy-back
leaving minimal external
debt
As oil prices have fallen,
Nigeria has remained away
from international capital
markets
Figure 4
USD m
40,000
30,000
20,000
10,000
0
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
2003-2009
Sources: IMF, Country authorities, Standard CIB Global Researc
7
FX reserves
o
Despite previous oil inflows
inflows,
Figure 5
USD m
60 000
60,000
reserve levels remained low
45,000
providing little cushion
when oil prices reversed
o
Today, Nigeria continues to
30,000
15,000
have FX assets of over
USD45bn, which will cover
an estimated 16 months of
0
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
2003-2009
goods and services imports
8
4
Inflation
o
Oil inflows and rapid spending
Figure 6
% yy/yy
36.00
increases created chronic
inflation problems during
previous oil cycles
o
27.00
18.00
Structural reforms and fiscal
9.00
controls have protected
against a repeat of this
0.00
Yr 1
pattern, despite price shocks
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
2003-2009
in 2008
9
Non-oil GDP growth
o Previous oil cycles saw growth
f ll d
fall
despite
it iinflows
fl
as volatility
l tilit
undermined long-term
investment
o
o
Fundamental changes in the
last 8 years have allowed nonoil growth to outperform, and
protect against a retracement
in oil prices
The key constraint to
sustainable out-performance
going forward will be better
efficiency of infrastructure
investment
Figure 7
% y/y
10.50
10
50
7.00
3.50
0.00
-3.50
3 0
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Yr 7
2003-2009
10
5
Future risks and rewards
Staying steady through 2009
o
o
o
Figure 8: Currency flexibility is better
Re-pricing of currency was
critical to reflect lower oil
prices and allow the
economy to adjust rather
than facing a more severe
crisis later
130
Lower revenues must be
used as a driver to renew
and extend policy reforms
50
Fiscal savings mechanisms
must be further
strengthened and extended
170
90
10
Sep-96
Nov-99
Dec-02
Feb-06
Apr-09
USD/NGN w eekly
Sources: Reuters
11
Future risks and rewards
%
USDbn
o
1,000
0.80
Underlying growth potential
can be harnessed over a multi-
750
0.69
decade period to drive
500
0.58
250
0.46
Figure 9
sustained out-performance in
GDP growth
o
0
The end of easy global credit
Nigeria GDP (USDbn)
offers the opportunity to
access significantly higher
yields for those committed to
% global GDP
bps
1,600
Figure 10
financing Nigeria’s future
o
0.35
2009 2012 2015 2018 2021 2024 2027 2030
Infrastructure investment will
be critical to long-term growth
potential
Sources: IMF, Bloomberg, Standard CIB Global
Research
1,200
800
400
0
Nov-07
Mar-08
Jul-08
BB- EM oil sovereign index
Dec-08
Apr-09
EMBI
12
6
Questions
7
Sola David-Borha,
Deputy chief executive officer
Corporate & Investment Banking
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Investment Banking
o Transactional Products & Services / Custody
o Institutional & Corporate Banking
o Conclusion
2
1
Introduction
o Corporate & Investment Banking (CIB) is the wholesale banking
arm split into Global Markets
Markets, Investment Banking and
Transactional Products & Services / Corporate Banking
o Our aim is to be the leading Corporate & Investment Banking
franchise in Nigeria
o We have a track record of offering innovative and integrated
financial solutions to corporate and institutional clients
o We have a cross border franchise with Standard Bank Group
3
Introduction
o Services offered include debt and equity advisory, equities
brokerage structured and project finance
brokerage,
finance, trade services
services,
transactional banking and lending, global markets, custody, private
clients services and private equity funding
o We have built up a strong track record in the past and have further
enhanced our offering with a structure that ensures a customer
f
focus.
Thi
This will
ill position
iti th
the b
bank
k tto participate
ti i t effectively
ff ti l iin growing
i
Nigerian capital markets and to participate in infrastructure projects
4
2
Corporate & Investment Banking structure
CIB
Global Markets
Investment Banking
Transactional products and
services and Corporate
Banking
Advisory & Equity
Capital Management
Transactional
Banking
Debt Capital
Management
Trade Services
Project Finance
Institutional &
Corporate Banking
Brokerage
Investor Services
Structured Trade
Finance
Private Client
Services
Medium Term /
Structured Lending
Corporate Affairs
& CSR
Private Equity
Research
5
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Conclusion
6
3
Global Markets
Foreign Exchange
Fixed Income
We are one of the leading market makers
in this business, being one of the largest
suppliers of foreign exchange to the
market and in the top 2 of FX trading
An appointed primary dealer and market
maker for Federal Government of Nigeria
bonds and the number one bank by turnover
in this market
We run the largest portfolios of foreign
exchange forwards and swaps of all banks
in the market
We hold over 80% of the market share of
sales of Nigerian bonds to foreign investors
Money Market
An appointed primary dealer and market
maker for Federal Government of Nigeria
treasury bills
We run a very active primary & secondary
market sales and trading desks for short-term
corporate debt and were the first bank to sell
Nigeria commercial papers to the
international market successfully
Structuring & Derivatives
With the support of our Global Market teams in
London , SA and New York we are one of the
few local banks with the capability to structure
th issuance
the
i
off long
l
and
d short
h t term
t
securities,
iti
to
t
international standards…as well as distribute to
the international markets
We are the first bank to issue NGN denominated
FX options
We thrive on creating solutions for our clients
7
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Conclusion
8
4
Corporate Finance - recent deals
Equity
q y
Capital
Markets
• US$1 billion MTN Nigeria Private Placement
• Largest private placement in the history of the Nigerian capital market
• US$550 million
illi Starcomms
St
Plc
Pl P
Private
i t Placement
Pl
t
• 110% subscribed. First telecoms company to be listed on The NSE
• US$1.7 billion Zenith Bank combined Public Offering
• Over 300% subscribed
Debt
Capital
Markets
• N275 billion Bond Issuance Programme by the Lagos State Government
of Nigeria
• First issuance was a N50 billion 5 Year Fixed Rate Bond Offering in
Jan 09
Ja
09. 116%
6% subsc
subscribed
bed
Financial
Advisory
• Sell-side advisory for Michelin Group
• Sale of 99% equity stake in Michelin Nigeria Limited to a core investor
through a competitive selection process
9
Corporate Finance - prospective deals
• Equity investment in Tourist Company of Nigeria Plc by Sun International Ltd
Equity
Capital
Markets
• N2.5 billion Private Placement for H.F.P. Engineering (Nigeria) Limited
• Major player in construction
construction, infrastructure and project development
industry
• Sell-side advisory involving a construction company
Financial
Advisory
• Sell-side advisory involving a conglomerate
• Buy-side advisory involving a brewery
Awards
o Best Issuing House in Nigeria Award – Nigerian Issuing House League (2006) & (2007)
o Best Issuing House in Africa – African Bankers Award (2007 & 2008)
10
5
Project & Structured Finance - recent deals
Industrial
& Mining
• N100 billion Commercial Paper Programme for Dangote Industries Limited
• €28.3 million bridge facility to Lafarge Cement WAPCO Nigeria Plc
• €225 million Multi-Currency Syndicated Term Facilities for Lafarge WAPCO
• N21 billion Syndicated Notes Issuance Facility for Benue Cement Company
Infrastructure
& IPP
• $400 million Lekki Infrastructure Road Project
Prospective
deals
• Financial Advisory Mandate for a US$2 billion Fertilizer Plant to
be situated in Angola/Nigeria
• US$20 million Multi-Currency Term Facilities for a company
• N650 Million Term Facility for Flour Mills of Nigeria Plc
• To finance the expansion of their Pasta Line
Awards
o Project Finance African Telecom Mobile Deal of the Year – Euromoney (2007)
o African PPP Deal of the Year – Lekki-Epe Expressway – Euromoney (2008)
o African Infrastructure Deal of the Year - Lekki-Epe Expressway – Project Finance
International 2008
11
Private Equity and Brokerage
Private Equity
o
Naira equivalent of up to USD200 million committed to investing in private equity
transactions
o
o
Awaiting final regulatory approvals
Target sectors are FMCG, retail, telecoms & IT, logistics and distribution,
specialised manufacturing and infrastructure & resources
Brokerage
o Market leader with a 20% market share
o The equities research analysts team was
recently awarded African Financial Analyst of
the year in the banking sector at the 2009
Africa Investor awards held in Paris
o The research team is integrated with the SBG
research team to ensure both a global and
local perspective
SIBTC Mkt Share
Total Mkt Traded Value (N't)
25.0%
3
2.5
20.0%
2
15.0%
1.5
10.0%
1
5.0%
0.5
0.0%
0
2007
2008
Q1 09
12
6
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Conclusion
13
Transactional Products & Services
o Payments: electronic payments through
o
o
o
o
New Business Online (nBOL) cheque,
cross-border
b d payments
t
nBOL is a multi-currency, integrated
multi country banking channel
nBOL builds on the award winning
South African Business Online solution
Cash Solutions: cheque and cash
collections, cash distribution, lending
and overdrafts
Trade Products: letters of credit, trade
finance and bills for collection
%
Pay direct collections and market share
3.5
N bn
2.5
3
2
2.5
1.5
2
1.5
1
1
0.5
0.5
0
0
Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
SIBTC PayDirect Mkt Share (%)
SIBTC PayDirect Total Collection (N'Bn)
14
7
Custody
o Largest custodian in Nigeria with more than N740 billion Assets
Under Custody (AUC) as at 30 September 2008
o Identified the growth potential available in the local market. Local
AUC is 11.4% of the total portfolio
o Bidding to be one of 3 domestic custodians in the Money Market
o Won the Award of Excellence 2008 as Global Custodian in Nigeria
& Sub-Saharan
S bS h
Africa
Af i
15
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Conclusion
16
8
Institutional & Corporate Banking (ICB)
o
ICB is CIB’s team of Relationship Managers (RMs). Our RMs are the
champions of the customer centricity service model employed across SBG
o
ICB key goal is to ensure that all the client’s financial service needs are
met thereby increasing product cross sell
o
CIB has identified the following six priority sectors for greater focus :
1. Oil, Gas & Renewables
2. Telecommunications, Media & Technology/Entertainment
3. Power, Infrastructure & Construction (Property)
4 Public
4.
P bli S
Sector
t & International
I t
ti
l Organisations
O
i ti
5. Manufacturing & Distribution
6. Financial Institutions
17
Private Client Services (PCS)
PBB
CIB
Structured Finance
Project Finance
Corporate Finance
Private Equity
Property Finance
Treasury & FX
Access to specialists
Customized Solutions
Transactional Banking
g
Branch Network
Money Market Deposits
Loans
Cards - Debit & Credit
Internet solutions
Full product suite
o SBG linkages:
– Combined Offshore, PCS London, PCS
–
–
–
Wealth
SA, EAS & Melville Douglas to form
Standard Private Bank
St ff based
Staff
b
d in
i
– Jersey, Isle of Man, London, South
Africa, Dubai
Initial booking of clients in
– Jersey, Isle of Man, South Africa
New booking centre based in Nigeria,
– Future booking centres in Kenya,
Mauritius, Argentina
Financial Planning
I
Investment
Advisory
Ad i
Asset Management
Mutual Funds
Stock broking
Trusts/Estate Planning
Insurance
Research
o Key differentiators:
– Knowledge and understanding of
–
–
Emerging Market framework
– appetite to take-on Emerging Market
risk
i k where
h
rewards
d are matched
t h d
accordingly
Access to wholesale or investing banking
products & services
Link to wholesale bank already well
established
18
9
Outline
o Introduction
o Global
Gl b l Markets
M k t
o Conclusion
19
Conclusion
o
o
o
o
o
o
o
o
One of the most comprehensive product suite and service offering on
the market
nBOL a proven electronic channel in the South African market offers a
platform to grow our business in light of the move by both public and
private enterprises to electronic banking
Ability to leverage off SBG in respect of expertise and to source foreign
lines of credit
Highest credit rating in the Nigerian market
Well positioned for the federal government’s focus on infrastructure
development – we have the expertise and experience in house
Experienced deal team with proven track record
General market perception of the bank:
– Strong technical expertise coupled with relevant years of experience
– Highly ethical and law abiding
We are open for business, and have both capacity and ability to write
quality loans
20
10
Questions
11
Kayode Solola
Global Markets
Global Markets
o
Team of treasury specialists – traders, sales managers and research
analysts, spread over the different countries where the group has a banking
presence
o
Dedicated trading and sales teams, focusing on
–
–
o
market making and customer relationships
providing plain vanilla to specifically structured solutions to meet all
customer needs
Specialises in distributing emerging and developing market products to a
global investor base which comprises of G7, as well as emerging &
developing countries in all time zones
2
1
Global Markets
o
Our commitment is to continue being the market leader in innovation and
the professional execution of capital guaranteed, yield enhancement and
risk management strategies
–
providing clients with solutions that meet their needs and/or
requirements
–
providing an ongoing sales service to our clients by monitoring and
evaluating the appropriateness of trades entered into with respect to
changing market and regulatory conditions
3
Stanbic IBTC Global Markets
What we do
o Provide an integrated approach to the pricing & management of currency, interest rate,
equity and commodity risks
– To pprovide the most complete
p
risk management
g
solution to the client, either
local or international
o The GM team provides information, education and training to facilitate an
understanding of the pricing, evaluation, and application of the capital guaranteed,
yield enhancement and risk management tools available
o The sales team have a dedicated contact person who provides regular updates to
international investors on the local markets as well as regulatory changes
Value Proposition
o Product delivery
– Enhanced
E h
d vanilla
ill product
d td
delivery,
li
new product
d td
development
l
t & awareness
– Consistent pricing and customer service
o Market Information
– Reports, dedicated point of contact, proactive customer need assessment.
o Structured solutions
– Tailored solutions to individual needs
4
2
What we offer
Foreign Exchange
Structuring & Derivatives
o We are one of the leading market makers in this
o With the support of our teams in London and New
business, being one of the largest suppliers of
foreign exchange to the market and in the top 2 of
FX trading
York and our Corporate Finance teams; we are one
of the few local banks with the capability to structure
the issuance of long and short term securities
securities, to
international standard as well as distribute to the
international markets
o We ran the largest portfolios of foreign exchange
forwards and swaps of all banks in the market
though the CBN has restricted this of recent
Money Market
o An appointed primary dealer and market maker for
Federal Government of Nigeria treasury bills
o We run a very active primary & secondary market
sales and trading desks for short-term corporate
debt and were the first bank to sell Nigeria
commercial papers to the international market
successfully
Fixed Income
o An appointed primary dealer and market maker for
Federal Government of Nigeria bonds and the
number one bank by turnover in this market
o The first bank to issue NGN denominated FX
options.
Other
Highlights
o Meeting Customer needs is our focus.
o Market Updates and RDAS results are sent to
clients daily
o Due to ruling exchange controls we are limited to
3 year forward transactions; however this may be
3-year
provided at any time at the best possible rates
Award
o Best Bond House 2007 Award – Euromoney
o We hold over 80% of the market share of sales of
Nigerian bonds to foreign investors
5
Revenue contribution 2006
Money Market
23%
Fixed Income
25%
Foreign
Exchange
52%
6
3
Money Market
52%
Foreign
Exchange 31%
Fixed Income
16%
7
Foreign
E h
Exchange
29%
Money
Market
M
M
k t
61%
Fixed Income
10%
8
4
History
o
6 different ways of FX management were used between 1983 – 2008
–
I
Import
t License,
Li
SFEM,
SFEM DAS,
DAS AFEM,
AFEM IFEM and
d WDAS
o
They ranged between fully, part or minimal regulation (Minimal 2006-2008)
o
All FDI’s into Nigeria require a Certificate of Capital Importation (CCI) in
order to allow unfettered repatriation of the principal and gains
o
Moneyy Market is managed
g via a biannual Monetary
y Policy
y issued by
y the
CBN
o
A range of circulars are also issued for clarification or redirection as the
CBN see fit
9
Where are we
o
Retail Dutch Auction System (RDAS) was reintroduced in Jan 2009
o
Oil companies
p
and g
government agencies
g
were instructed to sell all their FX
inflow to the CBN only
o
The CBN instructed that interbank trading amongst banks should cease
o
Foreign investment in securities to be sourced outside the CBN window
o
BDC’s were restructured to increase supply of foreign currency to small end
users
o
Peg of lending and borrowing rates to 15% and 22% respectively
o
The MPR was moved to 8% (175 bps drop), liquidity ratio to 25% and cash
reserve to 1%
10
5
Impact on GM business
o Over regulation seen as a deterrent to trading
o Reduced interbank FX liquidity
o Though all FX demand still being filled by CBN, there is uncertainty
which investors see as a source of discouragement thus minimising
expected FDI’s
o CBN cap on interest rate will minimise ability to trade the money
market
o Has increased sales focus to corporate and retail clients
o Market uncertainty might lead to ‘flight to quality’
11
Looking forward
Strengths
o Staff
o Onshore/offshore franchise
o Group support on risk management
Weakness
o Limited service to corporate clients
o Smaller network
12
6
Looking forward
Opportunities
o First in with solutions (on/off shore cooperation)
o Turn around time
o Trade Lines
o Access to foreign funding based on high credit rating
o Flight to quality
Threats
o Competition
o “Briefcase” bankers
o Regulatory environment
13
Questions
7
Obinnia Abajue
Stanbic IBTC Wealth Group
What is the Wealth Group?
100%
owned
70.59%
owned
Stanbic
IBTC Asset
Managemen
t Limited
Stanbic
IBTC
Pension
Managers
Limited
Non-Pension Asset Management
Mutual Funds
Portfolio Management
Investment Advisory Services
Scheme
S h
Ad
Administration
i i t ti
Stanbic
IBTC
Wealth
Group
Pension Asset Management
Pension Investment Management
Pension Administration
2
1
What is the Wealth Group?
The Stanbic IBTC Wealth Group is the largest wealth management business in
Nigeria by assets under management (AUM)
o The individual businesses are the market leaders in their segments
o Stanbic IBTC Asset Management Limited
– Mutual funds, investment advice, individuals and non-pension asset
managers regulated by the Securities and Exchange Commission
– Largest non-pension asset manager with about 10% market share of
non-pension AUM
o Stanbic IBTC Pension Managers Limited
– Pension Fund Administrator (PFA) regulated by the National Pension
Commission
– Largest PFA in Nigeria with market of over 20% of pension AUM
3
Why wealth management?
Pension Reform Act 2004 created a clear distinction between pension and
non-pension asset management
o
o
The clear separation off investment management from
f
asset custody
o
Legally enforceable monthly contribution cycle: minimum 15% of the sum of
basic, housing and transport allowances
Compulsory participation by workers in any company employing at least
5 people
Large and youthful population will create a huge asset pool over the next
few yyears
o
o
Population of over 140 million of which over 50% is less than 18 years
Estimated workforce of about 20 million in mostly urban areas in formal and
informal sectors
Increasing affluence and growing middle class with financial security needs
4
2
Why wealth management?
Excellent fit with expanding retail banking business
o Product portfolio for distribution network
o Pension
P
i scheme
h
will
ill d
drive
i ffootfall
tf ll tto branch
b
h network
t
k
o Excellent brand extension potential
Decent margins with low capitalisation requirement
o Very strong cashflow generation capability
Industry still in early growth stages with significant upside for a
committed player
o Only about 3.5m pension accounts opened so far in the formal sectors
o Pension assets estimated to grow by over N100 billion a year
Clear value adding opportunity for Standard Bank Group
o Key focus areas of excellence: risk management, human capital development
and access to global best practice in asset management and investment
administration
5
Industry Analysis*
Strengths
o Large growth potential – industry in
formative stages
g
o Potential to achieve economies of scale in
process and achieve reasonably high RoIs
o Increasing government support and
improving investment conditions.
o Impact of Pension Reform Act 2004 is
expected to drive a massive asset
accumulation phase in Nigeria
Weaknesses
o Coverage is weak and penetration levels
still veryy low;; less than 4m registered
g
pension accountholders
o Assets are considerably exposed to the
Nigerian stock market as pension
regulations currently restrict investment in
offshore assets
o Distribution is still limited hence the low
penetration levels and under-developed
personal financial planning industry
Opportunities
Threats
o External competition threats from banks
etc seeking higher returns on capital
o Significant potential for institutional asset
management more so as insurance
companies grow in size
o Product development potential is
significant – asset classes are still limited
to equities, government bonds and money
market instruments
*Agusto & Co (Jan 2009)
6
3
Key Indices as at 31 Dec 2008
AUM (N billion)
Wealth
SIAML
SIPML
N286.4
N48.5
N237.9
500
1,100
70
31
34 637
640 617
4
76
Estimated market size (N billion)*
Number of market players**
Number of individual clients
Locations***
AUM av. growth p.a. (2006 – 2008)
80
81.37%
13.43%
135.9%
The Wealth businesses represent about 20% of SIBTCs results
*Agusto & Co (Jan 2009)
**Pension market players are other PFAs (25) and Closed PFAs (6)
***Manned locations excluding agency relationships
7
2009 outlook
o 2009 will be challenging
– Impact of global financial crisis on Nigeria will impact asset
accumulation pace and savings propensity
– Effect of limited local asset classes expected to be more
pronounced with particular concerns around money market
securities based on perceived health of local financial
institutions
– Regulatory pressure expected to increase in line with global
trends
o The fundamental wealth business will remain strong with the
pension AUM continuing to grow at a robust pace
– However, fee income expected to come under some strain
due to market performance and regulatory pressures
8
4
Conclusion
o The Stanbic IBTC Wealth Group has a strong foothold in this
market space
o A strong potential to increase market share during these ‘difficult’
times
– Standard Bank pedigree provides assurance of safety and
stability where there’s a flight to quality
– Opportunities to expand the franchise value through the
Standard Bank global network
o The
Th potential
t ti l economies
i off scale
l achievable
hi
bl with
ith th
the b
banking
ki
franchise make this business case even more compelling in a
country like Nigeria with such tremendous upside expectation
9
Questions
5
Jacques Troost,
Executive director
Personal & Business Banking
Looking back to Jan 2008
o
61 branches across 26 states
–
–
no representation in 11 states
overall condition and placement not ideal
o
19 ATMs
o
650 staff
–
–
o
low volumes and availability
gaps around morale, training, sales and service culture, front line ownership,
leadership
230 000 accounts
–
60% dormancy, 95% of active base lower-end savings account customers,
mainly secondary relationships
relationships, 1 950 active current accounts
o
o
o
Limited segmentation of customers – mostly one service offering for all
o
Significant exposure to margin facilities
Cross sell ratio of 1:1 and limited product range
Good reputation for private banking but small market share and many secondary
relationships
2
1
The market
Nigerian States by population density
… and by population size
1
1
50% of
population
is Muslim
1
2
1
2
1
1
1
1
4
3
1
1
1
1
24
1
1
1
1 2 1
6 1
1
Top 5 Most densely
5 Least densely
1
Top 5 Most populous states
5 Least populous states
Lagos
(24)
Anambra
2,455
860 (1)
1
Taraba
41 (0)
1
2
Yobe
50 (0)
Imo
Abia
744 (1)
578 (2)
3
Niger
4
4
Borno
5
Akwa Ibom 568 (1)
5
Nassarawa
2
3
10.4m
1
FCT
1.4m (4)
2
Lagos
(24)
Kano
9m (2)
2
Bayselsa
1.7m (0)
57 (1)
3
Kaduna
6.1m (2)
3
Nassarawa 1.9m (0)
57 (1)
4
Oyo
6m (3)
4
Ebonyi
2.2m (0)
65 (0)
5
Rivers
5m (6)
5
Taraba
2.3m (0)
Source: National Bureau of statistics and MKI Research
3
The market
Nigeria
2001 - 2007
P
Population
l ti growth
th
Nigeria
2007 - 2016
12.4%
38.1%
Change in disposable income per capita
New savings
Increase in household indebtedness
54.6%
24.8%
32.1%
135.9%
87.5%
54.2%
Increased disposable income and household indebtedness have driven
retail growth and are expected to continue to do so
Source: Mckinsey
4
2
Retail banking potential still largely untapped
Nr branches /
10 000 people
Nr ATMs /
10 000 people
Mortgage loans
as a % to GDP
Nr cards per capita
Tunisia
1.0
South Africa
3.9
South Africa
0.78
UK
72%
South Africa
0.8
Tunisia
1.0
Tunisia
0.13
Hong Kong
52%
Morocco
0.8
Morocco
0.8
Morocco
0.075
Malaysia
28%
Egypt
0.4
Egypt
Egypt
0.052
South Africa
18%
Algeria
0.005
India
2%
Nigeria
0.004
Nigeria
0.05%
Algeria
0.4
Nigeria
0.3
0.3
Algeria
0.3
Nigeria
0.1
Source: Mckinsey
5
The opportunity (bankable population)
% of Unregistered Businesses per Industry
50
52m
40
Importers
0%
30
Manufacturers
2%
20
Service
15%
10
14m
10m
8,5m
2,1m 0.45m
o
o
o
o
Irregular
Traders
Regular
Salaried
Businesses
HNI
Agriculture
85%
Trade
95%
Banked population estimated at 14m (12% of bankable population)
28% of all businesses registered
Most banks focussed on the mid to upper end
Our immediate focus is also on the mid to upper end of the market
6
3
Banking sector
Factors moving banking industries from emerging to
rapid growth
Germany,
France,
South Africa
Brazil, Russia,
India, China,
Turkey, Ukraine
United Kingdom,
USA
Ni i
Nigeria
Emerging
Rapid growth Mature growth Stabilisation
Decline
o
Development of functional credit bureau and credit
data base
o
Availability of retail infrastructure i.e. branches,
ATMs, POS, cards, e-payment solutions
o
o
o
Increased level of savings
o
o
o
Segmentation of the market
Increased level of risk assets
Deepening of product offering i.e. bundling of
products or products following the market trend
Development of new & alternative delivery channels
Increased customer base
Challenges to overcome: High cost-to-income ratio per customer; inadequate risk management
infrastructure; cost of expanding distribution network; lack of specialised retail banking skills;
non-existence of credit bureau; credibility of judiciary system to prosecute credit defaulters;
cumbersome mortgage documentation process
7
Source: KPMG review of banks report (2008)
8
4
9
Activity
10
5
Ongoing challenges and responses
o Volatility on the stock exchange
– Margin facilities reduced by N30bn
– Strict controls to proactively manage remaining margin book
– Grow alternative assets to ensure optimal spread of
concentration risk
o High cost associated with transfer of property ownership
– Focus of equity release facilities
– Proactive role to facilitate discussions between government and
mortgage industry participants to reduce statutory costs
o Market credit appetite in challenging economic times
– Flexible loan repayment options
– Transparency on fees and interest rates
11
Ongoing challenges and responses
o High cost of branch expansion
– Optimal distribution model
– Partnering with local suppliers
o Getting the salary into the account (primary vs secondary relationship)
– Needs driven service offering
– Acquire employee payroll base on the back of CIB relationship
o Staff experience levels and leadership skills due to bullish expansion plan
– Ongoing staff training
o Pre-draw down compliance challenges on credit applications
– Process re-engineering to reduce turnaround times
– Continued risk management standards
12
6
At the end we can only differentiate through the quality
of our service
In both 2008 and 2009 customer service remain the number one consideration of customers to
select their bank
15
Questions
7
Chukuka Chukuma
Head project and structured finance
Lekki-Epe Expressway: Lekki Toll Road Concessions
Highlights of the Lekki Toll Road Concessions
What is the LTRC & Why?
The LTRC is a pioneering project mandated
under a 30-year concession agreement with
the Lagos State Government
Government, pursuant to
which the project is designed to deliver
essential road infrastructure development
and services along the Lekki Peninsular
corridor
The Path to the LTRC Success
2H 2000 –
Lagos State Ministry of Works began investigating
how PPP schemes could be used to accelerate
the development of road infrastructure
2H 2003 –
Lagos State mandated ARM to develop a toll road
corridor along the Lekki peninsular
2H 2003 –
ARM appoints Standard Bank and Rand Merchant
Bank as its financial advisers to assist it in building
a financial base case and financing structure for
the project
2H 2004 –
The States Roads, Bridges and Highway
Infrastructure Board Act was passed into law
1H 2005 –
Feasibility study and financing plan was released
to potential lenders
1H 2006 –
Concession Agreement executed with the Lagos
State Government
2H 2006 –
Works commenced in 2H 2006
2H 2008 –
Financial Close on long term project
financing
o Last major investment in infrastructure in
Lagos State, was made in the late 1970s,
when Lagos had a population of 6 million
o The State has become crippled with traffic
congestion, as a result of the growth in
population
o Lagos State is presently the commercial
capital of Nigeria, with a population
estimated at circa. 14 million and the only
viable means of transportation around the
state is by road
2
1
A transaction of many firsts…
Key Project Parties
Record tenor and a sophisticated structure, the
LTRC achieves a number of ground breaking
achievements
achievements….
1
Project
j
Sponsor
2
Other
Shareholders
3
Concessionaire

Lekki Construction Company
Limited
4
EPCM
Contractor

Hitech

5
Financial
Advisers

ARM
Standard Bank
Rand Merchant Bank
Arranger &
Lender

o First road infrastructure development to
o
o
o
o
be financed and undertaken on a PPP
basis in Nigeria and West Africa.
A test case for the first State level
concession law, which is now the
template for the Federal Government and
other State governments concession
laws.
Longest tenor commercial financing ever
seen in Nigeria.
The longest tenor Naira/US$ cross
currency swap ever executed.
Strong Federal Government support
which provides for tax and other
incentives

6

Asset & Resource Management
Larue
Africa Infrastructure Investment
Fund
Hitech
Standard Bank
Stanbic IBTC Bank
3
Total Available Funding Summary
Source of Funding
USD Millions
NGN Millions
% of Total
Funding
Me anine (Lagos State)
Mezzanine
42
5 000
5,000
9%
Local Equity (ARM, Larue, Hitech)
33
3,971
7%
International Equity (AIIF)
25
2,965
5%
Standby Equity (ARM, Larue, Hitech)
8
1,000
2%
Total “Equity”
108
12,936
23%
International Bank Debt (Standard Bank & Stanbic IBTC)
92
11,000
20%
Local Bank Debt (FBN, UBA etc)
78
9,400
17%
Development Finance (AfDB)
62
7,450
13%
Standby Debt (FBN
(FBN, UBA)
29
3 500
3,500
6%
Total “Debt”
261
31,350
56%
Revenue During Construction
100
11,987
21%
Total Funding
466
56,273
100%
4
2
Our role & achievements
Our Role
Standard Bank of
South Africa (SBSA)

Financial Adviser

International Lenders Agent
g
Standard Bank
London (SBL)

Standard Bank
London & Stanbic
IBTC
Structured the longest tenor
Naira/US$ cross currency swap ever
executed

Single largest debt underwriter,
arranger and lender to the project
Opportunities
In addition to the fees and interest income, earned on this project
by Stanbic IBTC, SBSA and SBL, participation in this transaction
has opened up a great deal of opportunities for the Standard
Bank Group in Nigeria, some of these are as follows:o an unprecedented level of exposure of the Group’s project
and infrastructure finance capabilities within the Federal
Government, State Governments and the private sector;
o Jonathan Wood (and other members of the Standard Bank
Group) have been invited by the Federal Government and a
number of State Governments to either speak at conferences
or advise them on how to structure infrastructure projects;
o Stanbic IBTC/SBSA have now been shortlisted for a number
of different roads infrastructure projects.
Accolades
The LIR Project has so far won 4
awards, which has given Stanbic IBTC
and the Group significant exposure
African Transport Deal of the Year Lekki Expressway (2008)
African PPP Deal of the Year –
Lekki Expressway (2008)
African
Af
i
Infrastructure
I f t t
Deal
D l off the
th Year
Y
–
Best Africa Project Finance Deal –
5
Pictures of the Lekki Toll Road Concessions
6
3
Questions
4