#1STANBIC HOLDINGS PLC Financial Results Presentation For the six months period ended 30th June 2023#22 Table of Contents 1 2 3 Operating Environment Delivering our strategy Sustainable Returns STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#33 240 mif 1. Operating Environment KES 1.15 INTERIM DIVIDEND PER SHARE JUNE 2022: Nil Patrick Mweheire Chief Executive, Stanbic Holdings Plc STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#414.0% 12.0% 10.0% 10.0% 8.0% 7.9% 6.0% 7.5% 4.0% 2.0% 0.0% Kenya OPERATING ENVIRONMENT - GLOBAL AND REGIONAL OVERVIEW Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Inflation 364d T-Bill CBR Uganda Feb-23 Mar-23 Apr-23 May-23 Jun-23 18.0% 16.0% 14.0% 12.0% 10.5% 10.0% 7.5% 8.0% 6.8% 6.0% 4.0% 2.0% 0.0% Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 Inflation 364d T-Bill CBR 4 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION 8.0% 11.7% 7.0% 10.5% 6.0% 5.0% 5.0% 4.7% -7.9% 4.4% 4.0% 3.0% 2.0% 1.0% 0.0% Jun-22 Jul-22 Tanzania Aug-22 Sep-22 FX Reserves & Import Cover (Months) Oct-22 Inflation 364d T-Bill CBR Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 8.0 7.5 7.0 12.3% 6.0 10.0% 5.0 4.7 4.2 4.0 4.1 3.0 2.0 4.9% 1.0 0.0 Kenya Tanzania FX Reserves (USD Bn) Benchmark (In months) May-23 Jun-23 8.0 7.0 6.0 5.0 3.8 4.0 3.0 3.6 2.0 1.0 0.0 Uganda Import Cover (In months) -7.1% 5.0% 3.6% Global landscape Geopolitical Matters: Persistent Russia-Ukraine conflict China-Taiwan conflict - Elevated hostilities Sudan conflict - Breakout of war in April 2023, not yet resolved Tapering Inflation: After a period of elevated inflation, global headline inflation fell from 8.7% in 2022 to 6.8% in 2023 (IMF) Growth: Global GDP growth to slowdown in 2023 to 3.0% with weakness continuing in 2024 Tightening monetary policy - Rising interest rates in developed markets impacting dollar liquidity in emerging markets Regional landscape Inflation tapering across the markets (Kenya, Tanzania and Uganda) Pressure on FX reserves with Forex reserves in Uganda coming below 4-month benchmark#5117.8 Jun-22 Jul-22 OPERATING ENVIRONMENT - KENYA OVERVIEW 5.70% 5.10% GDP Growth 7.50% 5.0% 4.80% -0.30% 2018 2019 2020 2021 2022 2023 (f) USD-KES Exchange rate trend Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 140.45 19% YoY depreciation Apr-23 May-23 Jun-23 5 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION ■ RISING INTEREST RATES GDP CBR hikes: Central Bank rate (CBR) raised by 100bps. Cumulative increase over the last one year of 300bps T-Bill Rates: Interest rates are rising as investors are increasingly looking for high returns. 91-day up >380bps for the last 12 months Private Sector Credit Growth is expected to decline as rates increase The Kenyan economy grew by 5.3% in Q1 2023 compared to 6.2 % in Q1 2022. The growth was largely supported by rebound in agriculture, growth in Accommodation and Food Service, Information and Communication Technology, Transportation, Financial and Insurance, and Wholesale and Retail Trade. GDP is expected to grow by 5% in 2023 IMF) INFLATION Inflation: Tapering but above the Central Bank range of 2.5% to 7.5% as at end of June 2023 New tax measures to impact cost of living CURRENCY AND FX RESERVES Kenya shilling lost close to 1/5th of value year on year#66 STANBIC 1H23 FINANCIAL RESULTS PRESENTATION 2. Delivering Our Strategy O RETURN ON EQUITY 20.5% UP 472 bps Dr. Joshua Oigara Chief Executive, Stanbic Bank#72023 IS THE FINAL YEAR OF OUR 3 YEAR STRATEGY Delivering our strategy: Recap of our strategy Our Purpose Our Vision Our strategic priorities: Kenya / South Sudan is our home, we drive her growth To be a leading financial services organisation in Kenya and South Sudan, delivering exceptional client experiences and superior value What we need to do to deliver our Transform client experience purpose Our Technology priorities: The platforms we need to deliver on our purpose Execute with excellence Always On - Always Secure Future proof platforms Embed Agile Ways of Work Our culture priorities: How we need to behave to deliver our purpose and people promise 5Cs: Client First, Care for Colleague, Collaboration, Courage, Continuous Innovation & Entrepreneurship Mindset Our success measures: 6 value drivers 8 + CLIENT FOCUS 7 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION ΩΩΩ EMPLOYEE ENGAGEMENT, + RISK AND CONDUCT Drive sustainable growth and value Automation & Digitization iDEWS: Innovate, Decide, Execute, Work as a team, Share Information + OPERATIONAL EXCELLENCE FINANCIAL OUTCOME + SEE IMPACT#8Client focus DELIVERING OUR STARTEGY - TRANSFORM CLIENT EXPERIENCE STRENGTHENING THE CORE SMES ACCELERATED ACCESS TO BANKING • · Loans issued valued at KES 22b (June 2022: KES 15b) Chama App D.A.D.A (Women Support) Loans issued: KES 8.4b (2022: KES 6.9b) Since inception: KES 13.6b Stanbic Bank United Ma Self-Ser CTV Chama App • 31,518 users KES 1.2m loans issued Self service centres Opened in Kisumu Infrastructure • Loans issued: KES 1.2b (June 2022: KES 5.0b) AGENT BANKING BRINGING THE BA CLOSER TO YOU ANK Post Bank Partnership -Agency banking Agent outlets - 874 Affordable Housing • Loans issued: KES 219m (June 2022:156m) Cumulative: Kes 487m 8 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION (June 2022: 206) OUTCOMES Growth in customer base • • 12% growth in total customer base year on year 9% growth in primary customer base year on year Customer engagement • • • • CSI: 8.4 out of 10, target >8.5 NPS: 25, target >45 EUROMONEY AWARDS FOR EXCELLENCE 2023 BANK AWARD 2033 GIORANCE DealMakers AFRICA Best Investment Bank in Kenya ( 5 times in a row) Euromoney Awards for Excellence 2023 Best Investment Bank in Kenya 2022 Global Finance Awards 2022 Best Investment Advisor of the Year at the 2022 Dealmaker Awards East Africa Investment Bank of the Year 2023 Bonds, Loans & ESG Capital Markets Africa Awards Best CSR Bank in Kenya Global Brands magazine Best Sub Custodian Bank 2023 Global Finance magazine#9DELIVERING OUR STARTEGY - EXECUTING WITH EXCELLENCE EMPLOYEE ENGAGEMENT Employee Engagement OPERATIONAL EXCELLENCE Diversity & inclusion ■ Male Female - 52:48 KSh 3,000 Differently Abled - 0.6% ■ Youth - 41% N Operational Excellence MANAGING RISK Digital Lending (inc. Mjeki) • • Instant loans: KES 23b (June 2022: KES 16b) Geopolitical tensions (Global and local) Risk & Conduct Empowering our people Training hours per employee 21.7hrs, target 20hrs 28% of learning hours spent on future ready skills ■ 3 Leadership capacity building sessions held ■ 54% of roles were internal hires Customer Onboarding 98% accounts opened digitally Technology and Cyber risk Employee engagement ☐ Top 120 leaders summit ■▪ Connect sessions held every two months 9 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Tech Connect Account yati Tech connect account ■ Convenient and easy banking for technology companies / start ups LOAN REPAYMENT ■ Elevated credit risk (Macro pressure)#10SEE Impact DELIVERING OUR STRATEGY - DRIVING SUSTAINABLE GROWTH Financial Inclusion & Enterprise Development REPORT TO SOCIETY 202 Stanbic Bank CRAFTS WITH MEANING 20 Stanbic CAN BE FIVE MILLION KENYAN SHILLINGS ONLY -5,000.000 Education SES SETS SCD FFE Climate change and Sustainable finance ■ KES 43m in grants and catalytic funding disbursed to 490 MSMEs. Cumulative - KES 199m disbursed (In partnership with strategic partners) ■ KES 8.4b loans issued to D.A.D.A (women) Cumulative KES 13.6b issued Gatina primary feeding program • • • 。 >1500 needy children fed daily - 95 days of feeding in 2023 。 >142k meals served in 2023 Employee volunteerism - Over 200 Stanbic employees participated in volunteer programs 20 computers donated for the Digital skills training • 952 MSMEs trained • • Blue Economy Programme rolled out Over 200 MSMEs trained on ESG • 97% (21.5kgs) of waste recycled 61 new clients screened for E&S risks • USD 100m financing to green projects Compliant with CBK Climate Risk guidelines • 10 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION • • 69 MSMEs coached#1111 3. Delivering Sustainable Returns KES. PROFIT AFTER TAX 7.1BUPAT 47% Dennis Musau Chief Financial and Value Officer STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#12INCOME STATEMENT HIGHLIGHTS KES Revenue 21.0b 2022: KES 15.2b 个 38% 6.2% Net interest margin 2022: 4.98% 122 bps 41.6% Cost to income 2022: 48.2% KES 7.1b Profit after tax 2022: KES 4.8b 20.5% Return on Equity 2022: 15.8% 47% 472 bps KES 17.84 2.18% Credit loss ratio 2022: 1.08% 110bps KES 1.15 Interim Dividend per share 2022: Nil 100% 12 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION 663bps 12 Earnings per share 2022: KES 12.13 47%#13STRONG GROWTH MOMENTUM IN OUR PERFORMANCE June 2023 KES m June 2022 KES m % Change Net interest income 12,051 8,343 44% Non-interest revenue 8,899 6,860 30% Total income 20,950 15,203 38% Operating expenses (8,718) (7,335) (19%) Pre-provision profit 12,232 7,868 55% Credit impairment charges (2,497) (1,261) 98% Profit before tax 9,735 6,607 47% Tax (2,683) (1,811) 48% Profit after tax 7,051 4,796 47% 13 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Key highlights The Group (Kenya Bank, South Sudan Branch, SBG Securities and Stanbic Insurance Agency Limited) reported a profit after tax of KES 7.1b; Improvement in Net Interest Income on the back of growth in the lending book and improved margins Growth in non-interest income mainly driven by growth in trading revenue on increased volumes and better margins as well as Investment banking fees and mobile banking fees Increase in credit impairment charges mirroring tough operating environment Costs growth reflecting the high inflationary pressure coupled with investment in better technology to enhance client experience, investment in people, business growth and key investments to support our strategy#14STEADY GROWTH IN ALL INCOME LINES KES Millions KES Millions 18,000 16,797 16,000 14,000 12,000 10,000 8,000 6,000 4,746 4,000 3,150 2,000 June 2023 June 2022 10,000 9,000 8,000 12,051 11,494 7,000 6,000 Interest income 5,940 8,343 5,000 ■Trading and other income Interest expense 4,525 4,000 ■Net fees and commissions ■Net interest income 3,000 2,000 2,958 1,000 2,335 June 2023 June 2022 June 2023 June 2022 42% 45% 58% 55% 14 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Non-Interest income Net interest income Key Takeouts ☐ Net interest income increased year on year by 44% mainly explained by growth in the lending book, improved margins and managing cost of funds Growth in trading and other income due to higher margins and increase in client flows Fees and commission boosted by key investment banking deal and fees from digital channels#15OPERATING EXPENSES AND CREDIT IMPAIRMENT KES Millions KES Millions 10,000 9,000 50.0% 48.2% 48.0% 3,000 2,496 2,500 8,000 7,000 2,000 46.0% 4,713 6,000 1,500 3,662 Other operating expenses 1,261 5,000 44.0% Staff costs 1,000 4,000 41.6% 42.0% CTI 3,000 500 2,000 4,005 3,673 40.0% 1,000 Credit imp (500) 38.0% June 2023 June 2022 2,658 1,609 General debt provision Specific debt provision (162) (348) June 2023 ■June 2022 Key Takeouts Operating costs: driven by investment in people, technology and business growth ■ Decline in cost to income ratio due to revenue growing faster than costs Key Takeouts ■ Growth in impairment charges mainly within Corporate and Investment Banking, provisions for Business and Commercial Banking tall trees and additional provisions for Unsecured personal loans and mortgages in Personal and Private Banking 15 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION TM#16BALANCE SHEET HIGHLIGHTS KES 384b Total assets 2022: KES 342b 13% KES 244b Customer loans 2022: KES 217b 12% KES 259b 9.23% NPL ratio 2022:10.36% 113bps 16 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION 12 Customer deposits 2022: KES 236b 10% Liquidity ratio *(Bank) 35.8% Statutory minimum: 20% 17.4% Total capital ratio *(Bank) Statutory minimum: 14.5%#17GROWTH IN KEY PERFORMANCE DRIVERS KES millions Assets Financial investments 2023 2022 Change % Strong growth in customer loans with a 12% YoY growth underpinned by demand in manufacturing, agriculture and trade sectors as we continue to support our customers Strong growth in customer deposits demonstrating the trust our customers have in us 54,726 52,570 4% Loans and advances to banks Key highlights 37,353 26,943 39% Loans and advances to customers 244,034 217,097 12% Other assets 48,167 44,969 7% Total assets 384,280 341,579 13% Liabilities ☐ Deposits from banks 26,821 22,582 19% Deposits from customers 258,559 235,649 10% Borrowings 12,335 6,040 104% Other liabilities 22,614 19,118 18% Total liabilities 320,329 283,389 13% Equity Total equity Liabilities and equity 63,951 58,190 10% 384,280 341,579 13% 17 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#18DOUBLE DIGIT LOAN BOOK GROWTH Net Loans and advances to customers Loans and advances by product June 2023 KES millions 250,000 245,000 240,000 235,000 230,000 225,000 220,000 217,097 215,000 210,000 12% 244,034 205,000 200,000 June 2022 June 2023 18 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION 69% Key Takeouts June 2022 Home loans 12% 15% Overdrafts 66% 4% Vehicle asset finance(VAF) Term lending Loan growth mainly from manufacturing, agriculture and trade sectors 13% 17% 4%#19ASSET QUALITY: SUSTAINED IMPROVEMENT IN LOAN BOOK QUALITY GROSS NPLs (LESS INETEREST IN SUSPENSE ) Trend for loan book quality 16,000 11,000 19,479 6,000 10.1% 8.3% 11.1% 7.2% 11.6% 7.3% 9.2% 10.5% 18,972 81.6% 81.7% 81.1% 80.2% 1,000 Jun-22 Jun-23 Sep-22 Dec-22 ■Net NPLs (excl. IIS) NPL ratio and CLR 10.36% 10.08% 11.09% 11.64% 9.23% Mar-23 ■Stage 1 Stage 2 ■Stage 3 Jun-23 Key Takeouts NPLs below industry level of 14.9% Healthier loan book with 90.7% of the book classified as performing loans compared to 88.4% reported in Q1 2023 Discounted value of security and provisions held adequate to cover for NPLs ☐ 2.35% 2.21% 2.45% 2.18% 1.08% Jun-22 Sep-22 Dec-22 Mar 23 Jun 23 -NPL ratio CLR 19 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#20DEPOSITS Customer Deposits KES millions 300,000 250,000 201,551 200,000 150,000 100,000 50,000 Key Takeouts 256,682 232,946 235,649 258,559 IIII Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 ■ Customer deposits grew by 10% year on year with core accounts accounting for 89% of total deposits 20 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Customer Deposits by products 26% 0.4% 6% 5% 27% 4% 7% 1% 62% June 2023 LC acceptances Current accounts Savings accounts Call deposits Fixed deposits June 2022 62% LC acceptances Current accounts Savings accounts Call deposits Fixed deposits#21LIQUIDITY AND CAPITAL REMAIN SOLID TO SUPPORT GROWTH Liquidity Ratio (Bank only) Capital Adequacey Ratio (Bank only) RWA-Risk weighted Assets 40.0% 35.8% 35.9% 20.0% 35.0% 18.0% 17.4% 30.0% 16.2% 16.0% 14.5% 13.9% 14.0% 14.5% 25.0% 14.0% 12.0% 10.5% 20.0% 20% 20% 10.5% 10.0% 15.0% 8.0% 10.0% 6.0% 5.0% 4.0% 2.0% 0.0% June 2023 June 2022 0.0% June 2023 June 2022 Core capital to RWA 21 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Total capital to RWA Statutory minimum core capital to RWA Statutory minimum total capital to RWA#2223 Subsidiary and branch performance Dennis Musau Chief Financial and Value Officer STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#23SUBSIDIARIES AND BRANCH PERFORMANCE Stanbic Holdings Plc PAT: 7.1b 47% up Stanbic Kenya Stanbic South Sudan June 2023 YoY Var PAT June 2023 | YoY Var KES 56m 6% down PAT KES 53m Stanbic Bancassurance Intermediary Ltd June 2023 | YoY Var 31% up PAT KES 6.7b 43% up • Growth in key balance sheet indicators Improved NIMS Increased trading revenues driven by a higher client flows. Negatively impacted by an operational risk incident, which has since been resolved. • • Increased revenue from stand alone insurance products • Increased cross sell 23 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION SBG Securities June 2023 YoY Var PAT KES 154m >100% up Improved market share: 47% from 12% . Reduced equities market turnover by 32%#24SUMMARY PERFORMANCE OF STANBIC BANCASSURANCE INTERMEDIARY LIMITED Key Takeouts June 2023 KES m June 2022 KES m Change % This performance reflects: Net interest income Fees and commission 4 3 28% 144 142 1% Total income 148 145 2% Total expenses (71) (86) (18%) Increase in volume of business placed with insurance companies Increased uptake on standalone insurance products and revenue from embedded insurance solutions Profit before tax 77 59 30% Tax (24) (19) 29% Profit after tax 53 41 31% 24 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#25SUMMARY PERFORMANCE OF SBG SECURITIES June 2023 KES M June 2022 KES M Change % Brokerage commission Other revenue 52.2 57.5 (9%) 234.2 55.7 >100% Total income 286.5 113.2 >100% Total expenses (99.2) (97.9) (1%) Profit before tax 187.2 15.3 >100% Tax (27.4) (5.4) >(100%) Profit after tax 159.8 9.8 >100% 25 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION Key Takeouts ☐ This performance reflects: Significant growth in revenue year on year, mainly driven by advisory revenue A 9% decline in brokerage revenue, driven by a 32% year on year decrease in equities market turnover, which was partially offset by growth in market share Overall, SBG Securities was ranked 1st in equities trading market share, compared to the 3rd position held in the previous year. Market share improved from 12% as at end of June 2022 to 47% as at June 2023#26• KEY TAKE AWAYS Client Employee Focus Engagement Risk and Conduct + Operation and Excellence Financial outcome See Impact Strong performance across all revenue lines Navigated market challenges to deliver strong balance sheet growth • Operational efficiencies from digital transformation • Focused risk management amidst challenging economic environment 26 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION . Increased shareholder return Sustainable community engagement#27H2 2023 FOCUS AREAS 1 Growth & scale: Driven by focus on client needs 2 Efficiency: Leveraging digital investments for efficient client service 5 3 Risk management: Proactive and data driven risk analysis and management To be a leading financial services organisation in Kenya and South Sudan, delivering exceptional client experiences and superior value 4 Regional play: Leveraging Standard Bank presence in the region for borderless client service Future Ready Transformation: Building a sustainable financial services organization 27 | STANBIC 1H23 FINANCIAL RESULTS PRESENTATION#28THANK YOU