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H1 2021 Investor Presentation 19 August 2021 2

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H1 2021 Investor Presentation 19 August 2021 2 1 H1 2021 INVESTOR PRESENTATION 19 AUGUST 2021 2 Group Overview KCB’s Beyond Banking Strategy 3 Our Strategic Our 2023 Thrusts Aspirations CES Customer first, <15% Total assets with leading value Strategy Vision KES 1.5Tr NPS propositions 55+ Step change in CIR efficiency & productivity The very best 42% in customer experience, driving NFI Digital leader & digital a digital future 40% to the core PBT from subsidiaries 20% Scale to achieve regional relevance LARGEST FOOTPRINT IN THE REGION 4 26.8 M Customers 7,573 Staff 354 Branches 1,103 ATMs 26,394 Agents & POS / Merchants Kenya Bank National Bank of KCB Bank KCB Bank KCB Bank KCB Bank KCB Bank Ethiopia Rep Kenya Kenya Tanzania Burundi Rwanda Uganda South Sudan Office Branches 201 Branches and agencies 94 Branches 14 Branches 6 Branches 13 Branches 13 Branches 13 1 Staff ATMs 397 ATMs 105 ATMs 15 ATMs 8 ATMs 26 ATMs 15 ATMs 4 Agents 15,273 Agents 443 Agents 263 Agents 195 Agents 492 Agents 420 Agents 43 Staff 4,827 Staff 1,680 Staff 291 Staff 134 Staff 239 Staff 269 Staff 132 Other investments: KCB Insurance Agency, KCB Foundation, KCB Capital OUR ORGANISATION STRUCTURE 5 Board HR & AUDIT & RISK OVERSIGHT STRATEGY & IT NOMINATIONS GOVERNANCE Group CEO & MD Reporting to the Board & executing delegated powers Executive Committee General Management Assets & Liabilities Group Operational Risk & Management Credit Committee Management Committee Compliance Committee Risk Committee RATINGS 6 KCB BANK KENYA 2019 2020 2021 Credit ratings at par with the sovereign Rating B2 B2 B2 rating. Outlook Stable Negative Negative Credit rating affirmed KCB’s: • Solid profitability metrics • Stable deposit-based funding structure, and; • Strong capital buffers AWARDS 7 ❖ Best Bank in Kenya by: The Banker ❖ Global Finance World’s Best Bank Awards. Top 1,000 Banks ❖ Global Business Outlook Awards. ❖ World Economic Magazine Awards. KCB ranked 685th Globally 20th in Africa ❖ Best Bank in Kenya and Africa’s Best Responsibility Bank by Euromoney 1st in Eastern Africa Global Awards. ❖ Best Sustainable Bank by International Business Magazine. ❖ Most Socially Responsible Bank in Kenya by Finance Derivative Awards. ❖ Best ESG solution by Middle East & Africa Innovations Awards. ❖ Best Bank in Kenya for Customer Experience, Digital and Innovation by Global Brands Magazine Awards. ❖ Best in Digital Banking, Product Marketing and Mortgage Finance by Think Business Awards. ❖ Best Corporate and Best Retail Bank by Global Banking and Finance Awards. SUSTAINABILITY UPDATE 8 Signing of Net Zero Commitment in Capacity building; staff April 2021. trained on green lending. 58% Loans worth Kes 74.7B screened for E&S risks primarily in corporate and NZBA SME segments Aggregate reduction of 14% on our carbon footprint 9 Macroeconomic Highlights REGIONAL GDP RECOVERY 10 Projected GDP Growth Rates (%) Positive economic outlook as the region recovers 8.7 from the contraction in 2020 but COVID-19 still 7.6 posses a challenge due to 6.8 6.3 6.5 low vaccine availability. 5.7 5.7 5.3 5.0 4.6 3.7 2.8 2.7 Sub-Saharan 2.0 Africa (%) 4.0 Kenya Uganda Rwanda South Sudan Burundi Tanzania Ethiopia 3.4 2021 2022 2021 2022 Source: IMF REGIONAL CURRENCIES PERFORMANCE 11 KENYA Performance of regional currencies against USD; Jun 2021 vs Jun 2020 Down YoY. Up by same margin YTD. 12.81% Diaspora remittances up 20% in 12-months to June 5.34% Uganda driven by inflows and coffee exports. -0.11% -1.25% South Sudan devalued -3.19% its currency in Q1 21. -5.34% Rwanda Burundi Kenya Tanzania Uganda South Sudan REGIONAL CURRENCIES PERFORMANCE 12 Current account deficit, GDP % KENYA Import cover 5.81 months in end of June 2020 2021* 2022* 0.2 Exports up 11.1% in H1 2021 -2.7 -3.9 -4.3 -4.5 Imports up 21.9% in -4.8 -5.2 H1 2021 -5.4 -5.7 -8.4 -9.1 -11.4 -11.9 -12.2 -12.5 -13.3 -14.5 -15.7 Kenya Uganda Tanzania Rwanda Burundi South Sudan *Projected MODERATE INFLATION ACROSS THE REGION (%) 13 69.9 Inflation remained 67.0 moderate in most countries in the region on account of reduced prices of locally produced food items. 10.3 9.0 7.0 6.3 4.6 3.4 3.2 3.6 2.0 0.1 Rwanda Uganda Tanzania Kenya Burundi South Sudan Jun-20 Jun-21 STABLE CENTRAL BANK RATES ACROSS THE REGION (%) 14 Sustained accommodative 10.010.0 monetary policy stance by Central Banks in the region. 7.0 7.0 7.0 6.6 6.5 6.0 5.0 5.0 4.5 4.5 Rwanda Tanzania Burundi Kenya Uganda South Sudan Jun-20 Jun-21 15 Channel Performance ROBUST CHANNEL PERFORMANCE 16 Proportion of channel transactions per customer touch point in H1 21 98% of transactions performed 6% outsidethe branch channels 12% 13% 80% 29% 23% 2% Growth in average size of branch 7% teller transaction to Kes 350,000. Total value of The channel mainly handles big transactions ticket items. Kes 3.9Tr 227M 51% Total number of transactions in H1, a 45% growth from same period Share by number last year. Share by value Mobile Branch teller Agency banking ATMs, POS & iBank INCREASED ACTIVITY ON DIGITAL CHANNELS 17 Digital transactions account for 98% of the number and 49% of the value of all transactions. Kes 1.9T Value of digital transactions (Kes B) Number of digital transactions (M) Digital revenue (Kes M) Total value of non-branch transactions up 75% 75% 46% (10%) 4,778 1,886 104 4,296 96% Growth in average Mobi Service 71 transactions per active customer to 1,076 19 per month. H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 CONSISTENT GROWTH IN MOBILE BANKING 18 Value of mobile transactions (Kes B) Number of mobile transactions (M) Kes1.1T 104% 55% Value of mobile banking transactions 1,121 181 grew 104% 117 550 124% Growth in value of mobile banking transactions (excluding lending). H1 20 H1 21 H1 20 H1 21 Kes172B Mobile revenue (Kes M) Mobile transactions volumes by type Net mobile banking deposits (18%) 3,942 B2C, 19% 3,222 Float Purchase, 37% C2B, 35% Lipa karo, 1% B2B, 8% H1 20 H1 21 RESURGENCE IN MOBILE LENDING 19 Value of mobile loans advanced (Kes B) Kes 74B (11%) Value of mobile loans advanced. Up 7% QoQ. 83 10 74 115M 24% 7 Number of mobile borrowings up 34% YoY with Fuliza 23 36 38% increasing by 70%. Mobile loans average size 20% 44 Vooma loan: Kes 23,000 37 KCB Mpesa: Kes 9,200 Fuliza: Kes 400 H1 20 H1 21 Fuliza KCB Mpesa Vooma loan STRONG AGENCY BANKING PERFORMANCE 20 Value of transactions (Kes B) Number of transactions (M) 52% 26% 40% 277 27 22 Growth in average size of an 183 agency transaction to Kes 17,000. 23% Increase in Inua jamii disbursements to Kes 11B H1 20 H1 21 H1 20 H1 21 Agency revenue (Kes M) Agency transactions type 16% Others*, 2% Cash 313 deposit, 31% Balance enquiry, 39% 270 Cash withdrawal, 13% School fees, 15% *Others: Account opening, mini statement, load H1 20 H1 21 cards and funds transfer GROWTH IN ATM TRANSACTIONS 21 Value of transactions (Kes B) ATM revenue (Kes M) Share of value of transactions 38% (10%) Withdrawals, Kes103B 195 35% Deposits collected via ATMs in H1. 158 175 Up 91% YoY and 37% QoQ. 115 Deposits, 65% 65% Cash deposits share of ATM transactions by value. 11% by H1 20 H1 21 H1 20 H1 21 number. ATM Deposits growth 70 324 350 60 281 272 268 264 300 68% 236 Growth in average size of an ATM 50 59 250 40 200 deposit to Kes 174,000. Average 43 size of withdrawal steady at Kes 30 35 38 150 11,000. 20 27 27 100 10 50 0 0 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Value (Kes B) Count '000 SURGE IN POS AND INTERNET BANKING TRANSACTIONS 22 Value of POS transactions (Kes B) POS revenue (Kes M) 57% 42% 75% 28 436 Growth in number of POS 306 18 transactions with resumption of economic activities. H1 20 H1 21 H1 20 H1 21 Value of iBank transactions (Kes B) iBank revenue (Kes M) 73% 43% Growth in number of internet 131% banking transactions driven by 302 increased customer uptake. 151 211 65 H1 20 H1 21 H1 20 H1 21 23 Financial Performance LOAN BOOK GROWTH AND DISTRIBUTION 24 Sectoral Loans Comparison (%) Financial Services 1.8 3.3 1.6 Stable Loan Book Energy and Water 2.5 3.7 1.8 distribution over the Agriculture 2.7 3.6 3.1 period. Tourism,Restaurant and Hotels 4.4 3.4 4.4 Transport and Communication 4.4 7.3 5.1 Building and Construction 6.9 4.1 6.8 Trade 8.0 17.2 7.0 Manufacturing 12.5 14.1 13.4 Real Estate 18.8 14.6 18.5 Personal/Household 37.7 28.1 38.3 KCB H1 20 Kenya Industry Mar 21 KCB H1 21 10% Group Gross Loans (Kes B) 11 Growth in Gross Loans 670 driven by personal and 47 manufacturing sectors. 19% 612 LCY FCY 81% H1 20 Retail Corporate H1 21 ASSET QUALITY REVIEW 25 14.3% 25 75.0 80 70.0 Group NPL ratio improved 72.6 64.0 65.6 70 by 50 bps in the second 20 60 quarter. 60.9 61.7 96 50 Cost of risk improved to 15 84 2.2% driven by reduced 40 impairment charge on 10 corporate and digital lending 38 39 30 facilities largely from KCB 14.3 Kenya 13.1 20 5 4.0 8.4 7.8 2.2 10 1.3 0.4 0 0 H1 18 H1 19 H1 20 H1 21 NPL Group (%) CoR (%) Gross NPL (Kes B) CBK Coverage Ratio (%) IFRS Coverage Ratio (%) NON PERFORMING LOAN DISTRIBUTION 26 NPL breakdown by segment 11.9% 17.9% 14.9% 12.0% KCB Bank Kenya NPL 10.3% 10.5% 11.8% ratio in June 2021.
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