CRDB PLC The Bank that Listens

BANK 2016 RESULTS Press Conference 13th April 2017

1 Operating Environment - 2016 • During the year, the global economy faced numerous challenges with decline in commodity prices, appreciation of the US dollar against major currencies and slow investment growth. • Overall economic performance in continued to be strong with GDP growing at an estimated rate of 7%, inflation rate stabilizing at around 5%. • However, extended broad money supply (M3) grew by 2.9% showing low Liquidity in the economy. Banking Sector Landscape • Banking sector with Sixty (60) institutions and 732 Branches/outlets. • For the banking sector in particular, the operating environment for 2016 continued to be competitive with tight liquidity following government implementation of Treasury Single Account (TSA) and slow down in government spending affecting market deposit, lending growth and growing defaults by Business. • VAT on – fees and commission was also introduced during the year.

2 The strategic theme for year 2016 ‘THE YEAR OF CONSOLIDATION’ 1 • Alternative channels optimization to grow volume and value of transactions Sales • Retail growth • Retail Deposits growth • Diaspora and Premier Services

2 Operational • Transactions processing Automation Excellence • Enhance processing speed, reliability and uptime • Process optimization, simplification and standardization • Change management to increase productivity • Products and Services review for improvements • Centralized processing optimization

3 Network Fahari Huduma, alternative channels and Service centres including M-Wallet Expansion

4 MFSC Transforming MFSC to a Bank, Insurance business new subsidiaries, Market survey - transformation for a new cross border subsidiary. and new Subsidiaries

3 Major Milestones in 2016

• The year 2016 marked the Bank’s 20th Anniversary. • The overriding theme for the year was ‘Consolidation to Achieve Operational Excellence’ which implied smarter growth for accelerated profitability.

• Key areas: - Core Banking system upgrade was successfully implemented in May, 2016. - Establishment of Insurance Brokerage Company Ltd. - Implemented SME credit rating model. - Development of M-Wallet (mobile money Wallet) to extend banking services through mobile phones to the unbanked population. - Bank invested heavily in expansion of its network - 51 new branches/service centers and other outlets were opened and 78 additional ATMs installed and 812 new FahariHuduma agents (to reach 2,558 agents). - Automation of origination workflow to improve quality of credit appraisal process - The Bank completed rating by Moody's and for the first time an entity in Tanzania is rated B1 - Upgrade of Centralised back office workflow system

4 Market Share- Total Assets & Total Deposits

December 2016 December 2015 Total Assets STANBIC , 5% STANCHART, STANBIC, 4% STANCHART, 5% 6%

OTHERS, 32% NMB, 18% OTHERS, 35% NMB, 17%

EXIM, 4% EXIM , 5% CITI, 2% BARCLAYS, 3% CITI , 4% NBC, CRDB, 20% CRDB, 19% 6% NBC, 6% BARCLAYS , 3% , 4% BANK M, 3% December 2016 December 2015 STANBIC, 4% Total Deposits STANBIC, 5% STANCHART, 5% STANCHART, 6%

OTHERS, 31% NMB, 19% OTHERS, 28% NMB, 18%

EXIM, 4%

EXIM, 5% CITI, 2% CRDB, 22% BARCLAYS, 3% NBC, 7% CRDB, 22% CITI, 3% NBC, BARCLAYS, 7% BANK M, 3% 3% Source: Published Financials, December 2016 BANK M, 3% 5 Market Share – Shareholder’s Funds and Loans & Advances December 2016 December 2015 Capital STANCHART, STANBIC, 5% STANCHART, STANBIC, 4% 5% 5%

NMB, 18% NMB, 18% OTHERS, 35% OTHERS, 36% EXIM, 5% EXIM, 5% CITI, 4% NBC, CITI, 3% CRDB , 18% BARCLAYS, 7% CRDB, 17% BARCLAYS, 2% 2% NBC, 6% BANK M, 2% BANK M, 3%

December 2016 December 2015 Loans & Advances STANCHART, STANBIC, 4% STANBIC, 3% 5% STANCHART, 5%

NMB, 18% NMB, 17%

OTHERS, 35% OTHERS, 36%

EXIM, 4% EXIM, 5% CITI, 1% CITI, 1% BARCLAYS, BARCLAYS, 3% NBC, 2% 6% NBC, 5% CRDB, 21% CRDB, 22% BANK M, 5% BANK M, 2% 6 Source: Published Financials, December 2016 Top - NPL to Gross Loans as at 31st Dec. 2016

December 2016 Many banks in the market recorded NPLs above ’s 14.0% benchmark of 5% as at 31st December, 12.3% 2016, indicating a decline in the asset quality for the sector. 9.1% 9.4% 9.2% According to the Bank of Tanzania monthly economic review, from 4.1% 4.0% September 2016 credit to the private 3.0% sector by banks grew at an annual rate of 13.8% which was lower than 24.1% in 2015. The slower growth was

CITI BANK CRDB BANK M NBC BARCLAYS EXIM NMB STANCHART attributed to a more cautious lending approach adopted by banks as part of risk mitigation measures. December 2015 10.4% 9.3% The growth of loans to individuals and trade increased while growth was lower in agriculture, transport and 6.7% 7.0% 6.1% communication. Declines were also 5.5% registered in manufacturing, building 4.3% and construction. 2.6%

Source: BOT Report – Monthly Economic Review, September and December 2016

Source: Published Financials, December 2016 7 CRDB Profile end of December, 2016

. CRDB Bank PLC offers a Number of staffs ChartATMS Title Branch Network

comprehensive range of Corporate, 3,500 600 Retail, Treasury, Premier, Agent 3,196

3,000

banking and microfinance services 500 2,651 510

. Network footprint of; 2,500 2,387

432 400 – 250 branches including mobile 2,158 branches and service centers. 2,000 1,898 374

300 311 – 510 ATMs including 18 Depository 1,500 ATMs, 245 250

200 – 1,526 Merchants Network 1,000 199

100

– 2,558 Agents (Fahari Huduma) 500 120 93 103 – 455 Microfinance partner institutions.

0 0 – CHINA DESK 2012 2013 2014 2015 2016 – INDIA DESK

8 Shareholding Structure 30.09.2016 31.12.2016

NAME SHARES % SHARES % Above 10% DANIDA Investment Fund 548,067,648 21.0 548,067,648 21.0 PPF Pension Fund 260,882,095 10.0 260,882,095 10.0 Sub Total 808,949,743 31.0 808,949,743 31.0 Above 1% and less than 10% CDC Group Plc / International Finance Corporation / JPMCB FBO Africa Capitalization Fund Ltd 130,692,741 5.0 130,692,741 5.0 Mr. Aunali F Rajabali and Sajjad F Rajabali 106,706,104 4.1 106,706,104 4.1

General Partners IV Ltd-TZ 68,104,802 2.6 63,957,790 2.4

LAPF Pension Fund 58,077,549 2.2 58,077,549 2.2 Blakeney General Partners III Ltd 52,953,203 2.0 56,614,203 2.2

Kimberlite Frontier Master Africa Fund LP RCKM 47,292,695 1.8 55,152,958 2.1

Duet Africa Opportunities Master Fund IC 40,583,840 1.6 37,583,840 1.4 Hans Aingaya Macha 32,764,200 1.3 32,764,200 1.3

National Health Insurance Fund 32,040,040 1.2 32,040,040 1.2

Western Zone Tobacco Growers Cooperative Union Ltd 30,000,000 1.1 30,000,000 1.1 CMG Investment Ltd 29,330,971 1.1 29,330,971 1.1 Sub Total 628,546,145 24.0 632,920,396 24.2 Less than 1%

More than 28,000 shareholders 1,174,342,696 45.0 1,169,968,445 44.8

Grand Total 2,611,838,584 100.0 2,611,838,584 100.0 9 Investment Ratios

Share Performance Dec. 2015 Dec. 2016

Market Price Closing TZS 405 TZS 250

Earning Per Share (EPS) TZS 53.87 TZS 30.17

Price Earning Ratio (P/E) 7.50 8.28

Book Value (BV) 263.19 276.80

Price Book Value ratio (P/B) 1.50 0.90

Dividend Yield 4.2 4.0

Market Capitalisation (TZS billions) 1,057.80 652.90

Foreign Holding (%) 22.00 23.00 2016 Audited Financial Results

11 CRDB Bank Plc. – Performance Summary % Industry% Dec. 2016 Dec. 2015 (TZS Billion) Change Change Interest Income 568.2 497.4 14.2% 21.8% Interest Expenses 136.1 106.8 27.4% 31.0% Net Interest Income 432.1 390.6 10.6% Net Fees and commissions 154.5 148.9 3.8% Net Foreign Exchange Income 34.8 34.8 0% Operating Expenses 347.6 287.4 20.9% 13% Profit before provisions 234.1 254.6 -8.0% Provision for loss 115.9 66.9 73.3% Profit Before Tax 118.2 187.7 -37.0% -2.9%

Gross Loans & Advances to Customers 3,397.7 3,342.4 1.7% 5.6% Customer Deposits 4,109.9 4,246.2 -3.2% -2.9% Shareholder Equity 718.2 687.4 4.5% 14.9% Total Assets 5,415.7 5,407.8 0.1% 4.0% Return on Avg. Assets 2.2% 3.4% Return on Avg. Equity 10.3% 18.8% NPL/Total Loans 14.0% 8.4% 9.6% 12 Record full year earnings from strong Top line Revenue growth

5,578 - 1,069 49,025 41,467

128,978 68,512

74,093

Net profit 2015 Net Interest Fee and Fx Trading & Other Incomes Impairment Operating Net profit 2016 Income Commisions Revaluation Expenses

• During 2016, CRDB Bank recorded a strong top line –net interest income growth despite slow down in lending • Growing volumes from network expansion and digital banking supported growth in fees and commissions amid slowing economic activities. • High impairment growth was mainly from Corporate and SME affected by delayed payments and slow down in some sectors. • High operating expenses growth were due to continued investment to support higher business volumes and build capacity for future growth in line with strategy. 13 Financial Position -Strong Balance Sheet Growth

Strong sources of funding – TZS billions Total assets 0.1% Borrowing Equity 382 718 7% 14%

Deposit,

4,110, 79% TZS billions TZS

Funding Growth Through Deposit Mobilization 2012 2013 2014 2015 2016

CASA TIME -3%

22% 19% • Customer deposits account for 79% of total 28% funding in the Balance Sheet. 34% 30% • Borrowing includes subordinated debt of TZS 78% 81% 72% 66% 87.9 bn, other borrowings of TZS 294.3 bn. 70% • Low cost CASA base increased to 82% in Dec. 2016 (Dec. 2015: 81%) of total deposits 2012 2013 2014 2015 2016 with YoY decrease of 3% mainly due to transfer of Government deposit to BOT. TOTAL DEPOSITS 2,584 3,024 3,391 4,246 4,110 14 Diversified Loans Portfolio (TZS in billion) The Bank continued to maintain a strongly diversified portfolio

Corporate Retail 1.7% The Bank continued with its strategy to grow retail 28% 30% loan segment. 38% 45% 47%

Retails segment portfolio by Dec 2016 was 47% 72% 70% 62% 55% 53% compared 45% in Dec 2015 mainly driven by growth in personal loans and SMEs. 2012 2013 2014 2015 2016 Gross Loans 1,839 2,028 2,576 3,342 3,357 Corporate segment portfolio decreased to 53% Dec 2016 compared to 55% in Dec 2015. Diversified Portfolio among key sectors and segments

0% 0% 1% 1% 1% 3% 3% Mortgage 4% 3% 5% 13% 14% Individual 10% 21% 11% 30% 30% Staff Agriculture 8% 17% 24% 19% 10% Hospitality 18% 6% 24% Personal 7% 8% 24% 5% 17% 7% 4% Building & Constru. 6% 6% 5% 19% 11% 5% 5% MFSC 10% 5% 11% Transport & Com. 8% 8% 5% 3% 13% 3% 6% 11% 8% Manufacturing 10% 6% 4% SMEs 4% 12% 13% 16% 70% 70% Trading 19% 62% 15% Corporate 55% 53% Others 22% 21% 19% 15% 16%

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 15 NPL by Business Segment

382 • The Bank’s NPL was TZS 351.5 bn. In year 2015 compared to TZS 474.9 bn. in year 2016.

• Contributed mainly by corporate and SME affected by delayed payments and slow down in some sectors and 182 Tobacco customers.

• There is a turn around process for affected corporate customer. 30 47 12 16 28 17 1 0 0 2 • The Bank continues to reduce exposure in Tobacco CORPORATE MFSC MORTGAGE PERSONAL SME STAFF sector. WHOLESALE

NPL 15 NPL 16

NPL by Sector NPL by Provision

Agriculture 23% Agriculture 24% 37% 47% 7% Transport and Communication Transport and Communication 3% 1% 2% 14% Trade Trade 14% 11% 10% 3% Personal Personal 10% 8% 11% Manufacturing 41% 9% Manufacturing 12% 9% Hotels and Restaurants 19% 8% Hotels and Restaurants 6% 6% Building and Construction 15% 2% Building and Construction 4% 2% Others 18% 25% Others 27% 14% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0% 20% 40% 60% Dec-16 Dec-15 Dec-16 Dec-15

16 Cost to Income Ratio

63.00%

60.40%

56.90%

56.20% 55.80%

2012 2013 2014 2015 2016

Yield on Investments Cost of Funds 13.90% 12.90% 11.40% 11.40% 11.90% 3.00%

2.30% 2.30% 2.30% 2.00%

2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

17 Capital adequacy ratio

22.0% 20.0% 18.0% 19.4% 16.0% 17.6% 16.0% 16.0% 14.0% 15.1% 14.5% 14.3% 14.1% 12.0% 13.1% 10.0% 13.5% 8.0% 6.0% 4.0% 2.0% 0.0% 2012 2013 2014 2015 2016

Tier I Total

18 Subsidiaries of CRDB Bank Plc

CRDB Microfinance Services Company Limited CRDB Bank Burundi S.A. . Offers Microfinance products through its subsidiary by . The Bank has a subsidiary in Burundi, which operates partnering with Microfinance institutions (MFIs) which are three branches in Bujumbura. mainly SACCOS. Products offered include - microfinance loans and deposits on behalf of the parent company, information and . The subsidiary recorded a profit of TZS 2,385 million st communication technology solutions and business support. as at 31 Dec. 2016 compared to TZS 1,064 million recorded in the 4th quarter of year 2015. . The subsidiary made a profit of TZS 2.5 billion as at 31st . Total assets decreased from TZS 154 billion in Dec. December, 2016. 2015 to TZS 140.1 billion in Dec. 2016. . There were 455 partner MFIs at 31st December 2016 (2015: . Total deposits grew from TZS 60.4 billion in Dec. 441). 2015 to TZS 67.2 billion in Dec. 2016 . Total loans extended by the Bank to these institutions at the end of December 2016 stood at TZS 140.1 billion.

S/N Item Quantity Performance trend 2014 2015 2016 1. Service Centres 17 Total Assets TZS mn. 104,137 146,685 141,066 2. Mini Service Centres 63 Total Deposits TZS mn. 28,894 60,427 62,827 3. Mobile Branches 8 Net Profit (Loss) TZS mn. (3,578) 870.06 2,385 4. Retail Clients 123,512 19 CRDB Bank Plc Subsidiaries cont. ….

CRDB Insurance Broker Company

• CRDB Insurance Broker Company is CRDB Bank Plc 100% owned subsidiary company. • The insurance business has been operated under Microfinance Service Company as Insurance Agency since 2011 and Insurance Broker from 2014. In June 2016 CRDB MFSC Insurance was transformed to CRDB Insurance Broker Ltd. • The company is engaged in provision of insurance brokerage services including underwriting all types of insurance e.g. life and general insurance business. • During the first year the company made a profit after tax of TZS 421 million.

Gross Premium in Billions

Details 2013 2014 2015 2016

Premium Sales 8,244 12,094 17,333 25,647

20 Investor Pay-out – EPS & DPS - 2016

• The Board has recommend a dividend of Tshs 10 per share. Total amount of dividend recommended is TZS 26.1 billion, as compared to TZS 44.4 billion paid out for 2015. . This is 35.6% of Net profits for the year and 41.2% decrease from the prior year. Earning per share ChartDividend Title per share EPS Growth Rate

60 140% 114% 54.28

120%

50 43.94 100%

38.77 80% 40 37.1

60% 28.37 30 24% 40% 13% 5% 20%

20 17 0% 12 14 15 10 -20% 10

-48% -40%

0 -60% 2012 2013 2014 2015 2016

21 CRDB Target Position for the Year 2017

Market position Financial results

• Substantial strengthening of the bank’s • After tax profits increasing to TZS 135 bn. competitive position in majority of products. • Cost to income ratio reduced from 62% to • Maintain position in total assets, loans & 61% advances, and the corporate deposits market. • ROE: 15% • Target market share of banking industry • Headcount of 3,256 employees assets of 20% - 25%

CRDB Group in Tanzania & Regionally Qualitative indicators International markets

• Leading skills and capabilities in the market • 3-5% of net income to come from – customer service & IT international operations. • Strong corporate culture • Build foothold in East African markets. • Highly qualified employees • Target market share of at least 5% in • Effective and reliable system and processes Burundi by 2017. • Strong brand and loyal customers • Prepare for consolidation regionally.

22 CRDB Bank Awards and Recognition in 2016

CRDB Bank received 8 awards in different categories. 1. Africa Business Leadership Excellency Awards - African Leadership Awards, New York 2016. (Courtesy: African Leadership Magazine). 2. Best Retail Bank Tanzania – Banker Africa – East Africa Awards 2016. 3. The Best East African Bank of the year – African Banker Awards (AfDB Awards 2016). 4. Best Tanzania – International Banker Awards 2016. 5. Best Innovation in Retail Banking Tanzania – International Banker Awards 2016. 6. Best Local Trade Finance in Tanzania – Global Trade Review (GTR) 7. Certificate of Appreciation on financial contribution – Women’s Economic Empowerment Forum (WEEF) – The United Republic of Tanzania, Vice President’s Office.

CEO – CRDB Bank PLC 8. Top Individual Award ‘East African Banker Lifetime Achievement’ – Banker Africa – East Africa Awards 2016.

GM – CRDB Burundi S.A. 9. Best Enterprise in Banking in Burundi - Manager of the Year – European Business Assembly UK 2016.

23 Thank You

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