#1NMB BANK PLC 20th ANNUAL GENERAL MEETING 5th June 2020 AGILITY DILIGENCE REPEAT The Spirit of Great Banking! NMB#2ווןי 01 02 PRESENTATION FLOW BANK OVERVIEW & ACCOMPLISHMENTS - Our history, transformation, national & global recognition, current shareholding structure, 2018 vs 2019 & value added to stakeholders FINANCIAL REPORTS - NMB's position in the banking sector, Financial performance overview Q1 2020 RESULTS - Snapshot of our balance sheet 03 and profit and loss account Q1 2019 vs Q1 2020 04 05 06 COVID-19 Impact assessment and NMB's response to the impact Q&A Investor Relations office - 2019 DIVIDENDS - Dividend Payment as proposed by the board#3AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 01. BANK OVERVIEW & ACCOMPLISHMENTS NMB Close to you 3#4Established under the National Microfinance Bank Limited Incorporation Act of 1997, following the break-up of the defunct National Bank of Commerce. Three entities were formed: National Microfinance Bank, NBC Holdings Limited and National Bank of Commerce. OUR HISTORY 1997 Established 2005 Rabobank Group & The Government of Tanzania sold 49% to a consortium led by the Rabobank Group. The consortium consisted of Exim Bank (Tanzania) Limited, National Investments Company Limited (NICOL) and TCCIA Investment Company Limited. The Government sold 21% of its shareholding to the Tanzanian public through an IPO on the DSE market. At the close of the IPO, the Government had 31.8% stake in NMB which it holds to-date. 2008 IPO AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 2017 Name Change MO The bank changed its name from National Microfinance Bank Plc to NMB Bank Plc to reflect the fully fledged commercial bank it has become. 4 NMB Close to you#51997 OUR TRANSFORMATION 600,000 customer accounts > 4 million customer accounts Listed on the Dar es Salaam Stock Exchange > TZS 6.5trl Balance Sheet size Fully fledged commercial bank providing solutions to Government and Commercial clients 224 branches across Tanzania > 3.3 million MasterCard debit cards State of the art Internet Banking Platform > 2 million NMB Mkononi customers State of the art technology - Tier 3 Data Centre Limited product offering: savings accounts + payments < TZS 200Bn Balance Sheet size 794 ATMs Payment Factory NO ATMs NO Mobile Banking AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 97 branches across Tanzania NO Cards Limited Technology 2019 > 5,980 Agents 5 NMB Close to you#6AGILITY DILIGENCE REPEAT The Spirit of Great Banking! CURRENT SHAREHOLDING STRUCTURE Pension funds 2.0% Govt of Tanzania 31.8% NICOL 6.6% Patrick Schegg 1.0% NHIF 0.2% Other 13.8% NMB Aunali & Sajjad Rajabali 5.0% Rabobank Group 34.9% Morgan Stanley 2.8% SQM Frontier Africa 1.9% 6 NMB Close to you#7776 ATM NMB 2018 vs NMB 2019 6,800 Agency Banking 2018 3,450 AGILITY DILIGENCE REPEAT The Spirit of Great Banking! Staff 3.3 MILLION Accounts NMB ATM 794 5,980 Agency Banking 2019 Accounts Staff 3,450 4 MILLION 7 NMB Close to you#82017 AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 2019/18 NATIONAL & GLOBAL RECOGNITION Best Bank in Tanzania - 7th time in a row Euromoney Awards for Excellence EUROMONEY AWARDS FOR EXCELLENCE 2019 Best Bank in Tanzania - 6th time in a row Best Retail and Best Commercial bank in Tanzania Euromoney Awards for Excellence EUROMONEY AWARDS FOR EXCELLENCE 2018 Banker East Africa Magazine Banker AFRICA EAST AFRICA AWARDS 2018 Best Blended Finance Partner in Africa International Finance Corporation (IFC) IFC International Finance Corporation WORLD BANK GROUP Creating Markets, Creating Opportunities Best presented Financial Statement 2017 and 2018 National Board of Accountants and Auditors Best Retail Bank in Tanzania Best Bank in Tanzania 5th time in a row Best Bank Transformation in Africa Best listed Company Bank of the Year Asian Banker Awards Euromoney Awards for Excellence Euromoney Awards for Excellence Dar Stock Exchange Banker Africa THE ASIAN BANKER® STRATEGIC BUSINESS INTELLIGENCE FOR THE FINANCIAL SERVICES COMMUNITY EUROMONEY AWARDS FOR EXCELLENCE 2017 EUROMONEY AWARDS FOR EXCELLENCE 2017 Creating Opportunities DSE Banker AFRICA NMB Close to you 8#9AGILITY DILIGENCE REPEAT The Spirit of Great Banking! VALUE ADDED TO STAKEHOLDERS 2018 2019 31% Employees 8% Shareholders Dividend % 36% Total Tax 25% Expansion and Growth 2018 27% 9% Employees Shareholders Dividend % 36% Total Tax 28% Expansion and Growth 2019 27% Govt. Taxes: TZS 144 bn Govt. Taxes: TZS 183 bn Shareholders: TZS 33 bn 45% Shareholders: TZS 48 bn Investments: TZS 98 bn 47% Investments: TZS 144 bn Employees: TZS 124 bn Employees: TZS 138 bn 11% 9 NMB Close to you#10SUPPORTING MAJOR PROJECTS IN THE ECONOMY 10 Tabora, Igunga & Nzega Water Pipeline LC transaction facilitation - TZS 550 Bn Rehabilitation of Water treatment plant for DAWASA LC transaction facilitation - TZS 35 Bn Construction of SGR BG - TZS 140 Bn Ou VA ENDU WA SUR MPAKA MAKU TRC NOROGOND-MANUTUPORA SOLINE PROLECT o H₁ Supply of spare parts for Kinyerezi | LC-TZS 70 Bn REA contractor's BG & LC-TZS 105 Bn " TZS 1.2 Trillion TA AGILITY DILIGENCE REPEAT The Spirit of Great Banking! Structured financing for 400 TARURA & TANROADS contractors TZS 26 Bn Bus Rapid Transport Financing - TZS 100 Bn A Procurement of Terminal equipment TPA LC line - TZS 70 Bn TPA Pharmaceuticals and medical equipment LC - TZS 58 Bn msd medal sores department TARUDA Payment and collection solutions - TZS 3.5 Trillion collected in 2018 and 2019 NMB Close to you#11WE GIVE BACK TO THE COMMUNITY WE SERVE For the past 4 years, over TZS 4Bn used Over TZS 200Mn provided to the Government of Tanzania & Zanzibar to aid in the fight against Covid-19 NMB MB N NMB OFISI YA WAZIRI MKUU MILIONI MIA MOJA TU IVI 100 000 000 COVID-19 Relief Over 31,150 desks were provided for schools NMB NMB SUPPORTED BY NMB Computers Over 330 hospitals were provided with health care appliances Health Care Appliances Desks + Over 1,150 computers were provided to schools NMB NM AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 11 NMB Close to you#12.bl 02. FINANCIAL REPORTS AGILITY DILIGENCE REPEAT The Spirit of Great Banking! NMB Close to you 12#13AGILITY DILIGENCE REPEAT The Spirit of Great Banking! BANKING SECTOR 2019 2019 TOP 10 MOST PROFITABLE BANKS (PAT) IN TZS BILLIONS 122 No. 1 142.1 34.0 22.7 21.3 17.4 16.9 9.1 9.6 9.8 BANK I BANK H BANK G BANK F BANK E BANK D BANK C BANK B BANKA NMB 13 NMB Close to you#14AGILITY DILIGENCE REPEAT The Spirit of Great Banking! BANKING SECTOR 2019 PROFIT AFTER TAX (PAT) TREND 2019 Profit after Tax 14 451 357 239 209 386 132 142 105 93 98 2015 2016 2017 2018 2019 NMB PAT - Bank Sector PAT NON PERFORMING LOAN RATIO 6.4 11.7 10.4 9.5 8.9 6.4 6.7 4.8 5.9 2.1 2015 2016 2017 2018 2019 -NMB NPL Ratio -Bank Sector NPL Ratio 62% Industry average increase 46% NMB increase Industry Non-Performing loan ratio 2017 2018 2019 10.4% 8.9% 11.7% NMBS PAT 2019 Market share 37% NMB Close to you#15150 FINANCIAL PERFORMANCE OVERVIEW Profit After Tax (TZS Billions) Net Interest Income (TZS Billions) 154 93 98 492 467 142 449 46% 370 Y-O-Y Increase 2015 2016 2017 2018 2019 Non Interest Income (TZS Billions) 196 160 159 151 204 2015 2016 2017 2018 2019 4% Y-O-Y Increase AGILITY DILIGENCE REPEAT The Spirit of Great Banking! NFI growth driven by increase of revenues from NMB Mkononi, Agency banking commission, and Card fees. اس 518 5% Y-O-Y Increase M 2015 2016 2017 2018 2019 Operating Expenses (TZS Billions) 409 411 362 375 310 Increase of NII due to continued growth in loans and advances and investment in Government securities Impairment (TZS Billions) 30 13 137 131 100 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 0% Y-O-Y change 27% Operating Expenses remained flat. Y-O-Y Decrease 15 Reduction of Impairment charge due to improvement of loan Portfolio management NMB Close to you#16FINANCIAL PERFORMANCE OVERVIEW Loans and Advances (TZS Trillion) 3.6 3.3 2.8 2.8 2.5 Customers Deposit (TZS Trillion) 4.9 4.3 4.3 3.6 3.7 Total Assets (TZS Trillion) 6.6 5.5 5.7 5.0 4.6 Share holders funds (TZS Trillion) 1.0 0.9 0.8 0.8 0.7 16 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 11% Y-O-Y Increase 14% Y-O-Y Increase 15% Y-O-Y Increase Key Ratio 2015 2016 2017 2018 2019 Return on Equity % 23 20 12 11 15 Return on Asset % 3 3 2 2 2 Cost to Income Ratio % 57 59 58 59 60 Earning per Share (TZS) 298 308 187 195 284 Dividends per Share (TZS) 104 104 64 66 96 Tier 1 Capital % 20 19 16.9 16.5 17.1 Total Capital % 22 20 17.6 18.5 18.5 13% Y-O-Y Increase NMB Close to you#1711% Y-O-Y Increase AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 2019 BALANCE SHEET 2019 2018 Variance TZ' Billion TZ' Billion TZ' Billion % Variance Cash & Balances with BOT 1,341 1,070 271 25% Interbank Placements Government Securities Loans and Advances Other Assets TOTAL ASSETS 264 174 90 52% 764 740 24 3% 3,596 3,252 344 11% 590 444 146 33% 6,556 5,681 875 15% Customer Deposits 4,922 4,328 594 14% Borrowings 661 490 171 35% Shareholders Funds 972 863 109 13% TOTAL LIABILITIES 6,556 5,681 875 15% Loan to Deposit Ratio (LDR) 72% 78% Core Capital 17% 17% Capital Adequacy Ratio 19% 19% Loans & Advances increased by 334Bn between 2018 & 2019 14% Y-O-Y Increase Customer deposits increased by 594Bn between 2018 and 2019 35% Y-O-Y Increase The performance shows a positive jaws as deposits increased faster than loans & advances Borrowings increased by 171Bn driven by NMB bond which was oversubscribed by 333% 17 NMB Close to you#185% Y-O-Y Increase AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 2019 PROFIT & LOSS ACCOUNT Performance Summary Net Interest Income 2019 2018 Variance TZ' Billion TZ' Billion TZ' Billion % Variance 518 492 26.4 5% Non Funded Income Total Income Loan impairment Operating Income Operating Expenses 204 196 8.4 4% 723 688 34.8 5% (100) (137) 37 -27% 623 551 71.8 13% (411) (409) -2 0% Income Before Tax Tax 212 142 69.8 49% (69) (44) -25 57% Profit After Tax 143 98 44.8 46% Cost to Income Ration (CIR) 60% 59% Non Funded Income to Total Income (NFI/Total Income) Return on shareholder's fund 28% 28% 15% 11% 18 Net interest income increased by 26Bn driven by increased Loans & Advances. 4% Y-O-Y Increase 27% Non-Funded income increased by 8Bn between 2018 & 2019 Y-O-Y Decrease Loan Impairment has decreased by 37Bn between 2018 & 2019 Operating Expense has been contained Y-o-Y with a slight decrease or 2Bn NMB Close to you#1925 20 20 15 AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 10 10 5 0 CAPITAL ADEQUACY & LIQUIDITY 80% 78% 74% 20.3 19.2 76% 76% 17.1 16.9 16.5 71% 68% 72% 72% 70% 68% 19 19 66% 64% 21.6 20.4 17.6 18.5 18.5 62% 2015 2016 2017 2018 2019 Core I Capital Total Capital Loan to Deposit Ratio NMB Close to you#20III AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 03. Q1 2020 RESULTS NMB Close to you 20#21AGILITY DILIGENCE REPEAT The Spirit of Great Banking! Balance Sheet Q1 2020 BALANCE SHEET Cash & Balances with BOT Interbank Placements Government Securities Loans & Advances Other Assets Total Assets Customer Deposits Borrowings Shareholder's Fund Total Liabilities Loan to Deposit Ratio Capital Adequacy Ratio (%) Variance Q1 2020 TZ' Billion Q1 2019 TZ' Billion Variance TZ' Billion 1,129 1,341 (212) -16% 150 264 (114) -43% 931 820 111 14% 3,705 3,230 475 15% 556 901 (345) -38% 6,472 6,048 424 7% 4,758 4,556 202 4% 693 613 80 13% 1,021 880 141 16% 6,472 6,048 424 7% 81% 74% 20% 18% 15% Y-O-Y Increase M Loans & Advances increased by 475Bn between Q1 2019 & Q1 2020 4% Y-O-Y Increase Customer deposits increased by 202Bn between Q1 2019 & Q1 2020 21 NMB Close to you#2210% Y-O-Y Increase AGILITY DILIGENCE REPEAT The Spirit of Great Banking! Q1 2020 PROFIT & LOSS ACCOUNT Variance Q1 2020 Perfomamnce Q1 2020 Q1 2019 % Variance TZ' Billion TZ' Billion | TZ' Billion Net Interest Income Non Funded Income Total Income Loan impairment Operating Income Operating Expenses Income Before Tax 134 122 12 10% 60 49 11 22% 194 170 24 14% (22) (38) 16 -43% 172 132 40 30% (102) (104) 2 -2% 70 29 41 142% Tax (21) (9) -12 133% Profit After Tax 49 20 29 146% Cost to Income Ration (CIR) 53% 61% Non Funded Income to Total Income (NFI/Total Income) 31% 29% Net interest income increased by 12Bn between Q1 2019 & Q1 2020 22% Y-O-Y Increase Non-Funded income increased by 11Bn between Q1 2019 & Q1 2020 43% Y-O-Y Decrease 2020 146% Y-O-Y Increase Profit After Tax has increased by 49Bn between Q1 2019 & Q1 2020 22 22 Loan Impairment has decreased by 16Bn between Q1 2019 & Q1 NMB Close to you#23AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 04. COVID-19 IMPACT ASSESSMENT NMB Close to you 23#24Clients NMB RESPONSE TO COVID-19 IMPACT Promote the usage of digital and self-service delivery channels Relief to customers through restructuring of loans Monitor quality of the SME, MSME and Corporate loans portfolio to limit expected impairment impact Business Continuity Activated Business Response Forum to ensure strategy re- calibration for business turnaround Activated Crisis Management protocols and regular monitoring at ExCo level via Crisis Management Meetings AGILITY DILIGENCE REPEAT The Spirit of Great Banking! Staff 24 Continuously educating staff on best practices to combat Covid-19 outbreak > Insist on social distancing among staff and guide customers accordingly Provided staff with protective gear (Face Masks, and Hand sanitizers) Split staff in three groups; Work from Home, Work from Disaster Recovery site, and Work from HQ building Overall Businesses have started to re-open. Government has issued assurances; No lockdown Strong capital position to absorb anticipated impact Strong business ties with salaried government employees and government has maintained stability throughout NMB Close to you#25+ AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 05. Q&A NMB Close to you 25#26AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 06. 2019 DIVIDENDS NMB Close to you 26#272019 DIVIDENDS NMB Board proposes dividend payment of This is in accordance with the Bank's Dividend policy, as stipulated in the Articles of Association, to pay one-third (33%) of profit after tax as dividend and retain 66% of profit to strengthen the capital base investment purposes and for TZS 96 Per Share TZS 48BN Analysis done by management indicate no significant impact on the capital position after the dividend payment to the total capital position of the bank Total Dividend TZ' Billion: AGILITY DILIGENCE REPEAT The Spirit of Great Banking! 52 52 32 33 120 104 104 100 80 60 40 20 66 64 48 96 2015 2016 2017 2018 2019 27 27 NMB Close to you#28DISCLAIMER "NMB Bank Plc ("NMB"), has taken all reasonable care to ensure that this presentation is true and correct in all material aspects. This presentation and any other information supplied is not intended to provide the basis of any evaluation or as a recommendation by NMB, nor does it constitute an offer, to sell or buy any NMB shares. Any recipient of this presentation should make its own independent assessment of the condition and affairs of NMB. This presentation may include "forward looking statements" which includes all statements other than historical facts and data, including statements on the banks financial position, strategy or other plans and possible future scenarios. Such statements, if any, are not guarantees of future performance, and involve known and unknown risks and factors that could cause the actual results to be materially different from the forward-looking statements. No responsibility is accepted for the reasonableness of any such forward looking statements. NMB does not represent that this presentation may lawfully be distributed in any jurisdiction, and this presentation may not be re-distributed except with the express approval of NMB." AGILITY DILIGENCE REPEAT The Spirit of Great Banking! NMB Close to you 28