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KCB Group Plc Q3 2020 Results

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KCB Group Plc Q3 2020 Results KCB Group Plc Q3 2020 Results Q3 2020 RESULTS Group Macro Economic Channel Financial Overview Highlights Performance Performance KCB Group Plc Q3 2020 Results 2020 Plc Q3 Group KCB Overview Group Group 2 3 KCB Group Plc Q3 2020 Results Our Regional Presence 22.9 MILLION KCB BANK KENYA (ETHIOPIA Banking Businesses: CUSTOMERS REPRESENTATIVE •KCB Bank Kenya OFFICE ) •KCB Bank Tanzania •KCB Bank South Sudan •KCB Bank Rwanda 360 BRANCHES KCB BANK •KCB Bank Uganda SOUTH SUDAN 1,090 ATMS •KCB Bank Burundi KCB BANK KENYA •National Bank of Kenya 23,230 AGENTS & NATIONAL BANK OF KENYA •Ethiopia Rep. Office KCB BANK UGANDA KCB INSURANCE AGENCY MERCHANTS KCB FOUNDATION KCB CAPITAL Other Investments: KENCOM HOUSE LIMITED • KCB Capital Limited KCB BANK RWANDA STAFF • KCB Insurance Agency KCB BANK BURUNDI • KCB Foundation 7,644 • Kencom House Limited KCB BANK TANZANIA 4 KCB Group Plc Q3 2020 Results Our Footprint Touch Points: Branches 12 Branches 15 ATMs 3 ATMs 18 Agents 45 Agents 465 Staff 115 Staff 254 Branches 13 Branches 6 ATMs 26 ATMs 7 Agents 431 Agents 98 Staff 247 Staff 125 Branches 300 Branches 14 ATMs 488 ATMs 15 Agents 14,195 Agents 200 Staff 6,616 Staff 276 1 Staff 5 KCB Group Plc Q3 2020 Results Operating Environment Highlights RESTRUCTURED LOANS Kenya Banking Sector Total restructured loans, 38% of the total banking KShs1.12T sector loan book. Kenya’s banking sector continues to remain stable and LIQUIDITY resilient in the face Liquidity availed by the lowering of CRR advanced of the pandemic with strong liquidity 92% to customers, KShs. 35.2B. and capital adequacy ratios. PROFITABILITY Banking Sector HY20 PBT. Down 27.6% YoY. KShs 63.4B 6 KCB Group Plc Q3 2020 Results Operating Environment Highlights KENYA PHASED RESUMPTION Partial re-opening of schools in 2020 with 100% reopening 10PM – 4AM OF ECONOMIC scheduled for January 2021 Revised ACTIVITIES Scaling back of public activities and political rallies Curfew Hours Revised operating hours for bars and restaurants Moderate Reinforcement of no mask no service mantra restrictions re-imposed to RWANDA contain the Prohibition of public transport into and out of Kigali lifted. 10PM – 5AM spread of the Resumption of the normal Bank opening hours of 8AM to 5PM. Revised coronavirus Curfew Hours across the region. UGANDA Partial re-opening of schools and places of worship. Bars, 9PM – 6AM remain closed. Resumption of international flights. Nationwide Curfew 7 KCB Group Plc Q3 2020 Results Sustainability Update • KCB Bank Kenya received an approval for SUSTAINABILITY $150M from IFC to support its sustainable climate finance portfolio and scale up FOCUS green and SME lending. Ongoing • KCB Foundation distributed Covid-19 alignment with Containment interventions worth KShs. 6.5M to impacted individuals. the Principles of Responsible • A call to Global Multilateralism through the Banking UN Global Compact Commitment Charter saw KCB join other 1,294 Global CEOs and 29 Kenyan firms by signing a multilateral deal for equal and sustainable global economic growth. • Despite Covid-19 Restrictions over 67 financed projects – Corporate and SMEs worth KShs. 72.3 Billion were screened for Social and Environment issues through ESDD templates. 8 KCB Group Plc Q3 2020 Results Ranking and Rating THE ASIAN BANKER MIDDLE EAST AND AFRICA GLOBAL FINANCE AWARDS 2020 REGIONAL AWARDS 2020 KCB Group Plc ❖ Best Bank in Kenya. ❖ The Best Digital Bank in Kenya ranked 667th ❖ Best Investment Bank for Sustainable Finance in Kenya by BRAND AFRICA 100: AFRICA’S BEST BRANDS AWARDS The Banker’s GLOBAL FINANCE, 29TH ANNUAL ❖ 10th most liquid bank in Africa WORLD’S SAFEST BANKS RANKINGS top 1000 world ❖ Safest Bank in Kenya bank rankings ASSOCIATION FOR TALENT DEVELOPMENT ❖ Second Best Employee Talent Developer in the World RATING AGENCY KCB BANK KENYA CREDIT Credit rating at par with the Sovereign rating RATING B2 (Negative) Group Macro Economic Channel Financial Overview Highlights Performance Performance KCB Group Plc Q3 2020 Results 2020 Plc Q3 Group KCB Highlights Macro Economic Economic Macro 9 10 KCB Group Plc Q3 2020 Results Macro Economic Highlights Kenya GDP Kenya Q2 2020 GDP Performance(%) Performance 41.3 Kenya’s GDP 7.1 6.6 6.7 7.4 5.7 5.5 contracted by 5.7% 3.1 1.1 1.6 0.5 in 2Q 2020 due to 6.4 2.2 4.2 3.9 4.3 10.3 10.0 economic disruptions AGRICULTURE MANUFACT REAL TRADE EDUCATION TRANSPORT & FINANCIAL& CONSTRUCTION ICT HEALTH MINING& URING occasioned by the ESTATE STORAGE INSURANCE QUARRYING pandemic. -3.9 -6.9 -56.2 -11.6 GDP Contribution GDP Growth/Decline Select Kenya Quarterly GDP Performance(%) Kenya GDP Growth(%) 5.6 6.1 6.0 5.3 4.4 4.9 5.4 Q2 2020 1.0 Q2 2015 Q2 2016 Q2 2017 Q2 2018 Q2 2019 Q1 2020 2019 2020 Projected -5.7 Source: KNBS & IMF 11 KCB Group Plc Q3 2020 Results Macro Economic Highlights Regional GDP Performance Sub-Saharan Africa GDP Growth Rates (%) economy projected to contract by 3.0% 11.3 in 2020 due to 10.1 9.0 economic disruptions 6.3 occasioned by the 4.9 4.1 coronavirus 1.9 1.8 2.0 1.9 pandemic. Uganda Tanzania Burundi Rwanda South Sudan Ethiopia -0.3 SSA GDP Growth(%) -3.2 3.1 2020 2019 Growth Projected 2020 Projected 2019 -3.0 Source: IMF World Economic Outlook (October 2020) 12 KCB Group Plc Q3 2020 Results Macro Economic Highlights Inflation Evolution (%) 7.5 6.37 Kenya Inflation 5.82 6.06 5.56 5.78 5.62 5.47 4.95 and Interest 4.59 4.36 4.36 4.20 Rates Evolution 3.83 2.5 Inflation remained 2.65 2.65 2.7 2.43 2.52 2.5 2.2 stable in the third 1.8 1.8 1.6 1.6 1.9 1.7 quarter supported by lower food prices, the Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Inflation NFNF Upper Limit Lower Limit impact of the reduction of VAT and muted demand Interest Rates Evolution (%) pressures. 12.47 12.43 12.38 12.24 12.29 12.19 12.19 11.76 11.87 11.76 11.94 11.92 11.91 9.00 8.50 8.25 7.25 7.00 7.00 7.00 7.29 7.31 7.29 6.56 6.60 6.65 7.17 7.28 7.22 7.09 6.21 6.19 6.29 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Source: CBK & KNBS 91 Day T-Bill Avg Lending Rates CBR Rate 13 KCB Group Plc Q3 2020 Results Macro Economic Highlights Kenya Shilling/USD Monthly Exchange Rate Evolution 108.4 Local Currencies 107.3 to USD 106.7 Exchange Rates 103.8 103.7 102.4 101.1 Continued pressure on most currencies as a result of the effects of the SEP-19 OCT-19 NOV-19 DEC-19 JAN-20 FEB-20 MAR-20 APR-20 MAY-20 JUN-20 JUL-20 AUG-20 SEP-20 pandemic. Regional Currencies to USD Exchange Rates 3,684 3,712 2,315 Sep 19 2,289 1,915 1,863 1,138 Sep 20 910 164 160 37 28 Uganda Tanzania Burundi Rwanda South Sudan Ethiopia Source: Regional Central Banks 14 KCB Group Plc Q3 2020 Results Macro Economic Highlights Kenya Current Account Balance (% of GDP) Kenya Macros Highlights -5.0 -5.1 6.5% -5.8 -5.8 -5.8 Cumulative yoy growth in -6.9 Diaspora Remittances to -7.2 US $2.97B 2015 2016 2017 2015 2019 12 moths to 2020 Sep 2020 Projected Kenya 12 Month Private Sector Growth CBK Foreign Exchange 9.0% reserves stood at 7.7% 7.6% 8.3% 6.6% 7.1% US $8,605M, representing 5.22 months of import cover. SEP-19 OCT -19 NOV-19 DEC-19 JAN-20 FEB-20 MAR-20 APR-20 MAY-20 JUN-20 JUL-20 AUG-20 Source: Central Bank of Kenya Group Macro Economic Channel Financial Overview Highlights Performance Performance KCB Group Plc Q3 2020 Results 2020 Plc Q3 Group KCB Performance Channel Channel 15 16 KCB Group Plc Q3 2020 Results Channel Performance OUR CHANNEL Proportion of transactions per customer touch point CONTRIBUTION Q3 2019 AGENCY, BRANCH MOBILE INTERNET ATMS TELLER AND POS 98% 75% 5% 5% of transactions 15% performed outsidethe Q3 2020 branch. AGENCY, BRANCH MOBILE ATMS INTERNET TELLER 77% AND POS 4% 13% 17% 2% decline in non- branch revenue 16% decrease in average transactions / teller per day 43% decrease in Number of branch transactions. Q3 2019 by KShs. 1.1B Q3 2019 60.0 10.2 due to waiver of Q3 2020 Q3 2020 5.8 mobile banking 50.5 fees. Avg. Transactions / Teller per day Number of Branch Transactions (M) 17 KCB Group Plc Q3 2020 Results Channel Performance MOBILE Value of Mobile Transactions (KShs.B) No. of Mobile Transactions (M) Mobile Revenue (KShs.M) BANKING 182 683 6,949 6,025 149 26% 454 272 Decline in 41 2,051 total mobile loans advanced driven by a 49% decline in KCB Mpesa Q3 18 Q3 19 Q3 20 Q3 18 Q3 19 Q3 20 Q3 18 Q3 19 Q3 20 disbursements Total Mobile Loans Advanced (KShs. B) KCB Mpesa(KShs. B) Fuliza (KShs. B) MobiLoan (KShs. B) 159.4 117.7 97.9 53.3 49.7 47.8 13.7 14.7 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 18 KCB Group Plc Q3 2020 Results Channel Performance MobiTransaction Type (%) MOBILE BANKING Q3 2019 48.0 44.4 Q3 2020 33.8 33.6 21.2 91% 16.5 Q/Q growth in 2.0 values of C2B 0.6 transactions driven B2C B2B C2B Lipa Karo by the push to digital transactions Month on Month Evolution of C2B Transactions 2 1.84 60 and fee waivers 1.74 1.8 1.58 50 during the Covid-19 1.6 1.4 1.27 Period.
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