Standard Bank Group Limited · JSE:SBK
Standard Bank — UBS Warburg Conference 2001
33 slides from Standard Bank's conference presentation, October 2001
Slide 1: UBS Warburg Conference
UBS Warburg Conference October 2001 Standard Bank Investment Corporation
Slide 2: Challenges of top line growth
Challenges of top line growth South Africa u Consumer is credit averse u Competition u Rate cuts u Non-interest income under pressure Outside South Africa u Unlimited 2
Slide 3: Interest vs non-interest revenue
Interest vs non-interest revenue Non-interest income accounts for 51% of income 60 50 % 40 30 20 1996 1997 1998 1999 2000 HY2001 Net Interest income Non-interest income 3
Slide 4: Cost-to-income ratio
Cost-to-income ratio Consistent improvement 300 283 66 65 250 227 64 200 156 63 165 178 cents 124 62 150 136 % 92 61 93 100 74 60 154 59 127 50 86 103 62 72 58 0 57 1996 1997 1998 1999 2000 HY2001 Headline EPS First Half Headline EPS Second half Cost-to-income ratio 4
Slide 5: Operating expenses
Operating expenses Costs under control, +7% 5,000 4,000 9% 2,206 2,033 3,000 Rm 2,000 2,237 6% 2,364 1,000 0 June '00 June '01 Staff Other 5
Slide 6: Retail Banking
Retail Banking
Slide 7: Strategic direction
Strategic direction We are facing a continually changing business environment u Customer environment u Spending patterns u Mix u Technology u Competitive environment u Disaggregation u Specialisation u Share of wallet u New entrants u Internal environment u Product u Channel u Segment 7
Slide 8: Retail business structure and partners
Prism, IBM Edgars, MSA SAHL, ABIL, FIHRST Melville Douglas Liberty Charter bluebean SBSA Full Service Banks E Commerce Insurance & Employee Benefits Segment Players Product Players Originators Technology Partners 8
Slide 9: SWOT analysis: Strengths
SWOT analysis Strengths u Co-operative and experienced senior management team u Ability to innovate by harnessing technology u Strong Brand appeal with large customer base, especially the mass market u Alliances/JV’ s and partnerships u Established widespread points of representation both physical a
Slide 10: SWOT analysis: Weaknesses
SWOT analysis Weaknesses u Perceived service levels u Lack of communication u Weak cohesive channel distribution / network strategy / customer delivery value propositions u Too many products u CRM needs to be developed u Weak client retention 10
Slide 11: SWOT analysis: Opportunities
SWOT analysis Opportunities u Untapped markets u Greater leverage on alliances and exploit strategic relationship with Liberty u Re-engineer processes end to end u Customer self empowerment/self service with appropriate use of technologies u Improve staff attitude/problem resolution and knowledge by
Slide 12: SWOT analysis: Threats
SWOT analysis Threats u Socio and Economic climate / AIDS / Regulatory / Legislation u Fraud syndicates and actions of criminal gangs u Heightened consumerism / high mobility of customers u New entrants targeting selected high niche markets including micro lenders and non-Banks u Margin pressure u S
Slide 13: Greatest challenges
Greatest challenges u Create and manage business strategies u Further establish and develop customer relationships u Service these relationships u Manage change 13
Slide 14: Strategic goals
Strategic goals u Rated first in customer service u Employer of choice u Revenue from new products u Increase total transaction volumes by 10% per annum u Reduce cost-to-income ratio by 1% each year u Increase profitability per staff number by 20% per annum u Focus on direct channel volumes u Contin
Slide 15: Critical success factors
Critical success factors CSFs required to reach our vision our goals u Ability to attract high level staff u An informed understanding of customer expectations per strategic segment u Ability to measure performance u Clear lines of ownership and governance u Ability to implement plans with end-to-en
Slide 16: This is a journey, not a destination...
This is a journey, not a destination... u We have finalised the Vision and Goals collaboratively u The CSFs and capabilities will form the basis of our route-map going forward u Individual business units to prepare their strategies u We will then optimise across the business unit portfolios 16
Slide 17: 17
17
Slide 18: Key strategies
Key strategies u Maintain and build dominant positions in chosen areas of domestic markets and exit those where such positions prove unattainable u Contribute to hard currency component of Group earnings by selective participation in International Operations 18
Slide 19: Commercial
Commercial
Slide 20: Key strategies
Key strategies u Restructure balance sheet with focus on growth in lending book u Develop product offerings and services, focussing on emerging SME market u Enhance image, profile and culture of Commercial bank u Promote and further develop our electronic channel capabilities 20
Slide 21: International Operations
International Operations
Slide 22: Key strategies
Key strategies u Consolidate position as a leading specialist emerging markets bank u Further improve mix and quality of earnings u Develop and grow domestic, on-the-ground investment banking activities in key emerging markets u Grow private banking and asset management capability on a global emergi
Slide 23: Why these markets?
Why these markets? 4,000 1,000 3,500 900 800 3,000 700 2,500 600 2,000 500 400 1,500 300 1,000 200 500 100 0 0 Turkey Brazil Russia China SA Turkey Brazil Russia China SA Per capita GDP, 2000 Nominal GDP,1999 (US$) (US$bn) 23
Slide 24: Why these markets?
Why these markets? 1,270 500 90 450 80 400 70 350 60 300 50 250 40 200 30 150 20 100 50 10 0 0 Turkey Brazil Russia China SA Turkey Brazil Russia China SA Population, 2000 Number of cell phone subscribers (million) (million) 24
Slide 25: Cost containment
Cost containment u Steps to contain costs, but not lose focus on the top line: u Review and monitor staffing and headcount closely - we are not, however, planning on making any staff cuts across the board at present u Outsourcing of back office functions to South Africa where appropriate u Revenue e
Slide 26: Stanbic Africa
Stanbic Africa
Slide 27: Key strategies
Key strategies u Take Stanbic Africa to a new level, building on existing presence u Progress acquisitions u Determine and implement appropriate business models for each existing and new country u Selected rollout of micro-lending in the CMA countries u Bancassurance potential in CMA countries to be
Slide 28: Stanbic Group Strategy
Stanbic Group Strategy
Slide 29: Key strategies
Key strategies u Expanding the investor base - Increase foreign shareholder base u Most local institutions have Stanbic in their portfolio’s - it is the most widely held unit trust share u Increase in foreign ownership will improve placement power u Building a wealth business - Become a serious play
Slide 30: Key strategies - continued
Key strategies - continued u De-emphasising geography - Wherever possible run businesses on product/functional rather than geographic lines u Exchange control is still a factor inhibiting our structure u In start-up phases geography is more important than functional structures u SCMB and London are
Slide 31: Key strategies - continued
Key strategies - continued u Capital Allocation and Returns - Force businesses to use capital effectively - Exit businesses which cannot deliver appropriate returns u Continued focus on the returns in the international business u Rationing of capital will require us to exit or reprice certain types
Slide 32: Why Stanbic?
Why Stanbic? u Diversified revenue stream u Earnings growth u Improving management team u Inclusion in the MSCI emerging market banks index u Long term prospects u Our work is far from done 32
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