CRDB PLC The Bank that Listens

Investor Briefing 4th Quarter 2016 : Key Statistics

Location - East Africa  Boundaries - , Democratic Republic of Congo, Kenya, Malawi, Mozambique, Rwanda,Uganda and Zambia  Area - 947,300 sq km (includes the Islands of Mafia, Pemba and Unguja)  Geography Note - Mt. Kilimanjaro is the highest point in Africa and has glaciers - Indian Ocean in the East with vastly Coastal line - Bordered by 3 largest lakes on the continent- L. Victoria, L. Tanganyika and L. Nyasa - Blessed with abundant National Parks - Serengeti, Ngorongoro Crater, Selous, Mikumi, Ruaha, Katavi, Manyara and 10 others. - Island with massive historical attraction. - Olduvai George-first skull of human beings in Arusha.  Population - 50,000,000  Economy - Depends on agriculture, mining (gold, diamonds, tanzanite etc.) and tourism. Other sectors are construction, transport and oil & gas. - One of the fastest growing economy with GDP 7.2% by December 2016. - Annual Headline Inflation Rate for the month of December, 2016 increased from 4.8% to 5.0 % in the previous month.

Source: International Monetary Fund (IMF) 2 About Us

. CRDB Bank Plc is a leading, wholly-owned private in Tanzania offering a comprehensive range of corporate, retail, treasury, premier and microfinance services.

. The Bank was established in 1996 and has grown and prospered over the years to become the most innovative, first choice, and trusted bank in the country.

. CRDB Bank was listed on the Stock Exchange on 17th June, 2009.

Vision and Mission

Vision: To be the leading Bank, which is customer need driven with competitive returns to shareholders.

Mission To provide competitive and innovative financial products and services leveraging technology to achieve distinctive customer experience. We strive to create value for stakeholders and the society.

3 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 STANCHART, 5% STANBIC, 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% 4 Market Share – Shareholder’s Funds and & 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 STANCHART, Loans & Advances 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% Source: Published Financials, December 2016 5 Top - NPL to Gross Loans as at 31st Dec. 2016

December 2016 Many banks in the market recorded 13.0% NPLs above ’s 12.3% benchmark of 5% as at 31st December, 2016, indicating a decline in the asset 9.1% 9.4% 9.2% quality for the sector.

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 attributed to a more cautious lending CRDB BANK M NBC BARCLAYS EXIM NMB STANCHART 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 6 Banking Industry

. The Banking Industry continued to be competitive with 56 banks operating in the market, but the market is controlled by 5 Banks led by CRDB. . Banks continued to introduce innovative products and services such as internet banking, mobile banking and payment cards. – Expansion through additional physical and e-banking outlets – ATM’s, mobile banking, internet banking. – Increased competition in payment systems – debit cards, prepaid cards, money transfer and payment system by telecoms. . As of September 2016, 13 banks were licensed to operate Agent Banking which is expected to improve accessibility to banking services and convenience for customers. . Increased demand for qualified staff. . Potential for growth in – mortgage finance, investment banking, agent banking, microfinance and .

7 Financial Performance as at 31st December, 2016

8 CRDB Profile end of December, 2016 . CRDB Bank PLC offers a comprehensive range of corporate, 3500 Number of Staffs Number of Branches Number of ATMs 600 retail, treasury, premier, agent 3,196 banking and microfinance services. 3000 500 . Network footprint of: 510 2,651 – 250 branches including mobile 2500 2,387 branches and service centers. 432 400 2158 – 510 ATMs including 12 2000 1898 374 Depository ATMs 311 300 – 806 POS Merchants 1500 245 – 2,626 Agents (Fahari Huduma). 250 – 455 Microfinance partner 200 1000 199 institutions.

– CHINA Desk 120 100 500 103 – INDIA Desk 93 – Microfinance Subsidiary 0 0 – Burundi Subsidiary 2012 2013 2014 2015 2016 – Insurance Broker Subsidiary.

9 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

10 Investment Ratios

Share Performance As at 31st As at 31st 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 - -

Market Capitalisation (TZS billions) 1,057.80 652.90

Foreign Holding (%) 22.00 23.00

11 CRDB BANK Plc. – Group Financials as at 31st December, 2017 Performance Summary

(TZS Billion) Dec. 2015 Dec. 2016 % change Interest Income 497.4 573.5 15.2

Interest Expense 106.8 138.9 29.9

Net Interest Income 390.6 434.6 11.2

Net Fees and Commissions 156.4 140.5 (3.0)

Net Foreign Exchange Income 34.8 34.8 0

Operating Expenses 187.6 376.7 14.2

Profit Before Tax 187.6 125.5 (33.1)

Loans and Advances to Customers 3,260.5 3,272.9 0.4

Customer Deposits 4,246.1 4,063.9 (4.2)

Shareholder Equity 687.3 722.9 5.1

Total Assets 5,407.8 5,435.8 0.5

Return on Avg. Assets 3.0% 2.3% (23.3)

Return on Avg. Equity 23% 11.2% (51.3)

NPL/Total Loans 8.0% 13% 62.5 12 • Fee Income Composition • Deposits Composition

Fee Income Call 1.5%

Comm. M- Others Pesa 3% 4% Time 17.9%

Loan Aplication Foreign Fees Savings 35% Exchange 11% Comm. gain Service Simbanking 16% Charge Demand 6% 21% 45.5% Commisions (LC's & guarantees) 3% Card Business Draft & 20% transfers 5%

Savings Demand Time Call

13 Financial Position

Steady Balance Sheet Growth 0.5% 6000 35%

5000 29% 30%

25% 4000 18% 20% 20% 16% 3000 16% 18% 15%

13% 15% 5,408 2000 5,435

10%

billions

4,210 3,359

1000 3,075 5% TZS TZS

0 0% 2012 2013 2014 2015 2016

Total assets Crdb growth Industry growth

Key sources of funding – TZS billions Equity 722.9 • Customer deposits account for 13.7% Borrowing 76.8% of total funding in the 500.6 Balance Sheet. 9.5% Deposit • Borrowing includes 4,063.90 76.8% subordinated debt of TZS 84.5 bn, other borrowings of TZS 416.1 bn.

14 Loans and Advances (TZS in billion) 0.4%

28% 30% 38% 45% 47%

72% 70%

billions 62%

55% 53% TZS TZS

2012 2013 2014 2015 2016

Corporate Retail

Diversified Portfolio among key sectors and segments (Dec. 2016)

30% Individual 30%

Agriculture 17% 19% 1% 5% Mortgage 1% Hotels & Restaurant 5% Staff 5% Building and 3% 3% Construction 3% Dec-16 Dec-16 24% Transport and 6% Personal 24% Dec-15 Communication 6% Dec-15

4% MFSC 4% Manufacturing 7% 4% 19% SMEs 13% Trading 11% 15% 16% 53% Others Corporate 15% 55%

0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 50% 60%

15 NPL by Business Segment – Dec 2016

349 • The Bank’s NPL was TZS 270.8 bn. at Dec. 2015 compared to TZS 438.3 bn. at Dec. 2016.

• Contributed mainly by corporate segment by 79.9% caused by delays in payment by some big corporate 182 customer and Tobacco customers.

• There is a turn around process for affected corporate 47 customer. 30 25 17 11 1 0 16 0 2 • The Bank continues to reduce exposure in Tobacco CORPORATE MFSC MORTGAGE PERSONAL SME STAFF WHOLESALE sector.

NPL Dec 15 NPL Dec 16 Sector NPL as at Dec 2016 Sector Provision as at Dec 2016

28% Agriculture Agriculture 30% 37% 47% 2% Transport and Communication Transport and… 2% 1% 2% 16% Trade Trade 16% 11% 10% 6% Personal Personal 10% 8% 11% 13% Manufacturing Manufacturing 12% 9% 9% 4% Hotels and Restaurants Hotels and Restaurants 6% 8% 6% Building and Construction 2% 2% Building and Construction 3% 2% Others 29% 25% Others 22% 14% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0% 20% 40% 60% Dec-16 Dec-15 Dec-16 Dec-15

16 Customer Deposits Funding Growth Through Deposit Mobilization Deposit Growth (4.2 )% 4,500 30% • Deposits decreased by 4.2% year on year. 4,000 1,036 1,032 25% • 25.1% of total deposits are 3,500 held in foreign currency. 25% 405 • Foreign currency deposits 3,000 891 20% 17% increased by 0.4% mainly 2,500 resulting from decrease in 641 17% 13% 15% 2,000 volume of forex transaction 13% 12% 1,500 12% 3,214 3,085 10% in the market. Appetite to 8% 2,619 2,499 invest in TZS increased

billions 1,000 1,950 5% compared to USD (USD rate

TZS TZS 500 has been stable through out

- 0% the year.) 2012 2013 2014 2015 2016

(3.6)%

CASA Time Deposits 761 624 • 81.5% of deposits is

850 773 contributed by CASA. • CASA decreased by 879 3.6% compared to Dec. 3,485 3,360 2015. 2,512 2,617

1,712

billions TZS TZS

2012 2013 2014 2015 2016

17 Cost to Income Ratio Net Interest Margin

62.00%

60.40% 10.57% 9.10% 9.00% 9.00% 8.20%

56.90%

56.20% 55.80%

2012 2013 2014 2015 2016 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

18 Capital adequacy ratio 22.0% 20.0% 18.0% 19.4% 18.4% 16.0% 16.0% 16.0% 14.0% 15.1% 14.5% 14.3% 14.1% 12.0% 13.1% 15.4% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2012 2013 2014 2015 2016

Tier I Total

Risk weighted assets

69% 69% 4,000 70 % 67% Market Risk 3,500 66% 14 10 68 % 3,000 9 66 % 2,500 3 64 % 60% 2,000 3,624 3,731 62 % Credit Risk 1,500 8 2,882 60 %

1,000 58 %

billions 2,334 1,849

500 56 % Risk weighted Assets/Total Assets

- 54 % TZS TZS 2012 2013 2014 2015 2016

19 Subsidiaries of CRDB Bank Plc 1. CRDB Microfinance Services Company Limited . Offers Microfinance products through its subsidiary by partnering with Microfinance institutions (MFIs) which are mainly SACCOS. Products offered include - microfinance loans and deposits on behalf of the parent company, insurance products and services, information and communication technology solutions and business support.

. There were 455 partner MFIs at 31st December 2016.

. Total loans extended by the Bank to these institutions at the end of December 2016 stood at TZS 140.1 billion.

. The subsidiary made a profit of TZS 2.5 billion as at 31st December, 2016.

S/N Item Quantity

1. Service Centres 17

2. Mini Service Centres 63

3. Mobile Branches 8

4. Retail Clients 123,512

20 CRDB Bank Plc Subsidiaries cont. …. 2. CRDB Bank Burundi S.A.

. The Bank has a subsidiary in Burundi, which operates three branches in Bujumbura. • Burundi Economic Review . The subsidiary recorded a profit of TZS 2,385 . The country went into recession during year 2015 million as at 31st Dec. 2016 compared to TZS and GDP growth was estimated at negative 3.9%. 1,064 million recorded in the 4th quarter of year However, the outlook for 2017 projects a slight 2015. improvement in the medium term due to strong performance in the agricultural sector driven by a . Total assets decreased from TZS 154 billion in rebound in the coffee production and in the Dec. 2015 to TZS 140.1 billion in Dec. 2016. construction sector, especially the implementation of major hydro-electric projects funded by the . Total deposits grew from TZS 60.4 billion in World Bank. Dec. 2015 to TZS 67.2 billion in Dec. 2016. . Prospects for Burundi remain uncertain as the country remains vulnerable to external shocks from commodity prices combined with the Performance trend 2014 2015 2016 persisting socio-political tensions. The Country’s main economic objectives focused on policy Total Assets TZS mn. 104,137 146,685 141,066 reforms, to improve the business climate, infrastructure projects and improving domestic Total Deposits TZS mn. 28,894 60,427 62,827 revenues as the country is facing a decline in grants from donors. Net Profit (Loss) TZS mn. (3,578) 870.06 2,385

21 CRDB Bank Plc Subsidiaries cont. ….

• Burundi Economic Review Cont....

Macroeconomic indicators 2014 2015 2016 (projected) Real GDP growth % 4.7 -3.9 0.7 GDP per capita (Nominal USD) 315 306 278 Real GDP per capita growth 1.5 -6.3 6.8 CPI inflation (2013 as basis = 100) 103.7 111.1 118.1 Budget % GDP -2.5 -5.5 -5.8 Current account balance % GDP -17.6 -6.03 -9.7

• Source: Data from IMF- World Economic Outlook, BRB quarterly release of June 2016 and Ministry of Finance.

22 CRDB Bank Plc Subsidiaries cont. …. 3. CRDB Insurance Broker Company

Background of the CRDB Insurance Broker Company

Up to 2011 CRDB Insurance Agency

2012 CRDB MFSCL Insurance Agency

2014 CRDB MFSCL Insurance Broker

2016 CRDB Insurance Broker Ltd

Gross Premium in Billions Details 2013 2014 2015 2016 Premium Sales 8,244 12,094 17,333 25,647

23 Focus for 2016 and Milestones • The year 2016 marked the Bank’s 20th Anniversary. • The overriding theme for the year was ‘Consolidation to Achieve Operational Excellence’ which implied smarter delivery for accelerated profitability. - The Bank reinforced expansion of the network and sales optimization - Transformation of the Microfinance subsidiary into a fully fledged Microfinance Bank. - Establishing an autonomous Insurance Brokerage Company • Key focus areas: - Core Banking system upgrade was successfully implemented in May, 2016. - SME credit rating model was implemented and corporate rating and mortgage scoring are in use. - Development of M-Wallet (mobile money Wallet) to extend banking services through mobile phones to the unbanked population. - Expansion of FahariHuduma agent network by adding 850 agents (to reach 2,596 agents) - Full operationalization of the Department of Centralized Operations. 24 CRDB Target Position by 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 • Cost to income ratio reduced from 62% to products. 61% • Maintain position in total assets, loans & • ROE: 15% advances, and the corporate deposits • Headcount of 3,256 employees market. • Target market share of banking industry assets of 20% - 25% CRDB Group in Tanzania & Regionally Qualitative indicators International markets • Leading skills and capabilities in the • 3-5% of net income to come market – customer service & IT from international operations. • Strong corporate culture • Build foothold in East African • Highly qualified employees markets. • Effective and reliable system and • Target market share of at least 5% processes in Burundi by 2017. • Strong brand and loyal customers • Prepare for consolidation regionally.

25 CRDB Bank Awards and Recognition

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 Commercial Bank 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. 26 Thank You

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