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Private and confidential
Nigeria Investment Themes
Nigeria/South Africa - Doing Business Together Workshop
June 2014
2Contents
Section
1. Introduction to Stanbic IBTC and Standard Bank Group
2. Nigeria – Investment Themes
Private and confidential
Section 1Introduction
Stanbic IBTC Bank and Standard Bank Group
4Introduction
Stanbic IBTC Holdings Plc (“Stanbic IBTC Group”) is a financial Institution in Nigeria that offers end-to-end financial services such as:
– Corporate and investment banking.
– Personal and business banking.
– Investment management and brokerage.
Stanbic IBTC Bank Plc , a subsidiary of Stanbic IBTC Holdings, is Nigeria's only local bank with a Fitch AAA rating.
Its investment banking subsidiary Stanbic IBTC Capital Limited is the leading investment banking franchise in Nigeria with excellent capabilities in advisory and capital markets transactions.
Other Stanbic IBTC subsidiaries include the leading equities brokerage firm and the leading pension fund administrator in Nigeria.
Combines strong domestic coverage with regional and international reach.
Stanbic IBTC Holdings is 53.2% owned by Standard Bank Group and can draw on the deep resources within the group.
Stanbic IBTC emerged from the merger of Stanbic Bank Nigeria Limited with IBTC Chartered Bank Plc in 2007
BackgroundStanbic IBTC GroupKey points
Stanbic IBTC Bank Plc is Nigeria's only local bank with a Fitch AAA rating.
Key statistics 2013
Market capitalisation N213.5bn
Total assets N763.0bn
PAT N20.8bn
Average no. of employees 2,077
Incorporated as Investment Banking & Trust Company Limited and commenced operations as a Merchant bank
Obtained Universal Banking Licence in Nigeria
Listed on the NSE on 25 April 2005
Merged with Chartered Bank & Regent Bank and changed name to IBTC Chartered Bank Plc
Merged with Stanbic Nigeria and Standard Bank gained control of the combined entity in a US$1bn transaction
1989 2001 2005 2007
Vast Branch Network Across Nigeria
2012
Holding Company Structure was adopted. Stanbic IBTC Capital emerged from this process
Yinka SanniChief ExecutiveStanbic IBTC Bank PLC
176 branches nationwide
Sola David-BorhaChief Executive Stanbic IBTC Holdings PLC
5
Introduction and Overview
Standard Bank is Africa’s largest and leading bank
Premier South African-based financial services group focused on Africa
Full service bank offering:
– Corporate & Investment Banking (“CIB”)
– Personal & Business Banking
– Investment Management and Life Assurance
Global reach with presence in 31 countries
Distribution capabilities in world’s leading financial centers including New York, London and Hong Kong, China and Brazil
CIB provides corporate and investment banking services to corporate clients, financial institutions and international counterparties focused on emerging markets around the world
Key Points
Premier South African based financial services group with on the ground expertise across Africa
Standard Bank has expertise and specialist knowledge to effectively partner clients in achieving their emerging market expansion ambitions
Relationship with ICBC (20.1% strategic equity interest in Standard Bank) provides further international reach and strengthens Standard Bank’s access to what may soon be the world’s largest economy
Largest commercial bank in China
– assets over $3.062 trillion
Nearly 100 international branches with
representation in, Frankfurt, Hong Kong,
London, Luxembourg, Macau, Moscow,
New York, Seoul, Singapore
Listed on the Hong Kong Stock Exchange
and the Shanghai Stock Exchange
Africa
18 countries 1 283 branches 9300 ATMs on the
African continent
Rest of the World
13 countries outside
Africa
Key regional offices
Offices in key financial
centres including
London, Moscow, New
York, Hong Kong,
Nairobi, Lagos, Sao
Paolo and Dubai
Key statistics 2013
Market capitalisation $20bn
Total assets $162bn
Headline Earnings $1.8bn
ROE 14.1%
Employees 48, 808
6
Select 2013, 2012 & 2011 Accolades
Project Finance - Deal of the Year: Africa Power (2011)
Best Bank for Payments and Collections in Africa Best Foreign Exchange Bank and Provider in Africa Best Investment Bank in Africa Best Debt House in Africa Best Investment Bank in South Africa Best provider of Money Market Funds in Africa Best Sub-Custodian in Nigeria Best Trade Finance Bank in Africa Best Trade Finance Bank in South Africa Country awards for Best FX Provider in Nigeria
(Stanbic IBTC) and South Africa
Best Bank in Nigeria (2012) Best Bank in Uganda (2012) Best Risk Advisor in Africa (2012, 2011) Best Debt House in Africa (2012, 2011) Best M&A House in South Africa (2012) Best Project Finance House in Africa (2012) Best Private Banking Services overall for Mauritius
(2012) Deal of the Year: Namibian debut 10year bond
transaction (2012)
African Bond Deal of the Year: Joint Winner for restructuring of Senegal Debut Bond
Deal of the Year: Metorex acquisition by Jinchuan
Africa's top bank in The Banker magazine's annual ranking of the world's top banks. Standard Bank was ranked 112 out of the world's top 1000 banks (2012)
Deal of the Year: Bonds: Joint bookrunner for Namibia’s debut USD500 million 10 year 5.50% Eurobond (2012)
Deal of the Year: Loans: Sole Lead Arranger and Bookrunner for Helios Towers Tanzania USD85 million financing (2012)
Most Innovative Bank from Africa (2012)
Best cash management services in Africa Best Investment Bank in Africa Best Bank Malawi Best Investment Bank in Angola Best Investment Bank in Namibia Best Investment Bank in Nigeria (awarded to
Stanbic IBTC Bank) Best Investment Bank in Zambia Best Local Investment Bank in South Africa
First in Corporate Banking in South Africa First in Foreign Exchange Trading in South Africa
(peer ranking) First in Listings in South Africa (peer ranking) First in Money Markets in South Africa (peer
ranking)
Accugas – African Midstream Oil & Gas Deal of the Year (2011)
Deal of the Year: Africa Mining (2011) Deal of the Year: Africa Oil & Gas (2011) Deal of the Year: Africa Power (2011) Deal of the Year: Africa Renewables (2011) Nordstream – European Midstream Oil & Gas Deal
of the Year (2011)
The Banker: Top Bank in Africa (2012)
Key points
Global Finance:Best Investment Bank in Africa (2012)
Standard Bank – Recent Accolades
Best Bank of the Year – South Africa Best Investment Bank – Africa
Accugas – African Midstream Oil & Gas Deal of the Year
Nordstream – European Midstream Oil & Gas Deal of the Year
Pulkovo–European Airport Deal of the Year PA Resources – African Upstream Oil & Gas Deal
of the Year
Africa's top bank in The Banker magazine's annual ranking of the world's top banks. Standard Bank was ranked 112 out of the world's top 1000 banks (2012)
Deal of the Year: Bonds: Joint bookrunner for Namibia’s debut USD500 million 10 year 5.50% Eurobond (2012)
Deal of the Year: Loans: Sole Lead Arranger and Bookrunner for Helios Towers Tanzania USD85 million financing (2012)
Most Innovative Bank from Africa (2012)
Private and confidential
Section 2
Economic Overview of Nigeria
8Nigeria: An OverviewOverview
Strong economic growth forecast for Nigeria in spite of recent challenges
Government policy has been focused on stabilizing the financial services sector, privatization of key industries and stimulating growth
Nigeria is the largest economy in Africa
Africa’s largest consumer market with a population of 171 million people
Africa’s largest oil producer and 12th largest in the world, producing high-value, low-sulfur content crude oil
Third-largest recipient of FDI
Oil & Gas reserves: 1,080MMbbl & 1.69tcf, 2013 production approx 1.8MM bpd
Sovereign Ratings (2012): Fitch: BB-, S&P: BB-, Moody’s: Ba3
FX reserves (USD bn) : 36.9
Economic
Good economic growth – over 6.5% annually
Focus on oil & gas and agricultural potential
USD 31bn trade surplus
Increased FDI
Political
Key challenge is administration’s ability to deliver
change and implement structural reforms
Hampered by bureaucratic bottlenecks
Socio-cultural Population is young and growing
High unemployment
Technological Increased internet connectivity and mobile phone
usage
The business environment
Investment rationale
Largest population in Africa with positive demographic trends
Large proven oil and gas reserves
Generally constructive fiscal and monetary policies
Relatively low levels of government indebtedness
Major banking sector reforms have improved health of the
financial sector
Policies encouraging investment in key sectors
Key risks
Economy remains heavily dependent on recycling oil earnings
through fiscal channels
Onshore oil production remains vulnerable to security
disruptions in the delta
Weak political / judicial institutions and physical infrastructure
Ethnic and religious differences continue to divide the country
Physical security and crime remain problematic
9Nigeria Remains a Key Strategic Market in Sub-Saharan Africa
A regional hub for Western Africa
Sources: IMF World Economic Database, Standard Bank Group Economics, EIU.
Note: Size of bubble reflects relative GDP of each country
Southern Africa
East Africa
West AfricaWithin West Africa:
• Nigeria’s population is the largest on the African continent and eight largest in the world
• Largest GDP in Africa• US$37 billion in foreign reserves• Huge hydrocarbon resources, the largest
producer of crude oil in Africa with the second largest oil resources base in Africa and 8th largest gas reserve base globally
• Nigeria is the emerging economic locomotive of the African continent
Increasingly friendly business environment
Increasing population
C-Re locations
10Key Economic Reform Initiatives
Source: Stanbic IBTC Research
GDP growth trajectory alone is unlikely to deliver the overall uplifts desired in quality of life for consumers
Persistent inequality of distribution and the apparent lack of upward mobility
Economic inefficiencies that give rise to a sustained high cost of living need to be tackled in order to elevate and unshackle the consumer
11Other Key Investment Areas
Source: Stanbic IBTC Research
Nigeria's fundamentals will provide long-term demand for infrastructure
Government policies focused on manufacturing growth to provide employment, reduce import bill
Emerging consumer sector needs to be served with appropriate goods, retail experience and communication links
12
Nigeria Continues to be an Attractive Investment Market
Conclusions
The headlines surrounding the rebasing of the economy and Nigeria’s status as the Africa’s largest economy have refocused investor interest on Nigeria
Economic reforms have resulted in strong historical growth and are likely to continue to deliver similar performance going forward
Power reforms will change the face of Nigeria its just a question of timing
Successfully addressing structural bottlenecks that sustainably reduce the cost of living and allow for more diversified consumer expenditure is key to the development of the Nigerian consumer in our opinion
Security concerns have had a limited impact on economic growth, to this point
Foreign investors continue to have a meaningful role to play in spurring and supporting economic growth.
As Africa’s largest economy with a high growth rate, investors cannot afford to ignore Nigeria’s economy and potential
13Disclaimer
This presentation is provided for information purposes only on the express understanding that the information contained herein will be regarded as strictly confidential. It is not to be delivered nor shall its contents be disclosed to anyone other than the entity to which it is being provided and its employees and shall not be reproduced or used, in whole or in part, for any purpose other than for the consideration of the financing or transaction described herein, without the prior written consent of a member of the Standard Bank Group. The information contained in this presentation does not purport to be complete and is subject to change. This is a commercial communication. This presentation may relate to derivative products and you should not deal in such products unless you understand the nature and extent of your exposure to risk. The presentation does not include a personal recommendation and does not constitute an offer, or the solicitation of an offer for the sale or purchase of any financial product, service, investment or security. The investments and strategies discussed here may not be suitable for all investors; if you have any doubts you should consult your investment advisor. The investments discussed may fluctuate in price or value Whilst every care has been taken in preparing this presentation, no member of the Standard Bank Group gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information in this presentation Past performance is not indicative of future results. For the avoidance of doubt, our duties and responsibilities shall not include tax advisory, legal, regulatory accounting or other specialist or technical advice or services. You are to rely on your own independent appraisal of and investigations into all matters and things contemplated by this presentation. By accepting this presentation, you agree to be bound by the foregoing limitations. Kindly note that this presentation does not represent an offer of funding since any facility to be granted in terms of this presentation would be subject to the Standard Band Group obtaining the requisite internal and external approvals. Copyright 2010 Standard Bank Group. All rights reserved.
UK ResidentsThis presentation is not intended for the use of retail clients and must not be acted on or relied on by persons who are retail clients. Any investment or investment activity to which this presentation relates is only available to persons other than retail clients and will be engaged in only with such persons. Standard Bank Plc (SB Plc) is authorised and regulated by the Financial Services Authority (FSA), entered in the FSA’s register (register number 124823) and has approved this presentation for distribution in the UK only to persons other than retail clients. Persons into whose possession this presentation comes are required by SB Plc to inform themselves about and to observe these restrictions. Telephone calls may be recorded for quality and regulatory purposes. Standard Bank Plc, 20 Gresham Street, London, EC2V 7JE.
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Turkey ResidentsStandard Unlu Menkul Degerler A.S. and Standard Unlu Portfoy Yonetimi A.S. are regulated by the Turkish Capital Markets Board “CMB”). According to CMB’s legislation, the information, comments and recommendations contained in this presentation are not investment advisory services. Investment advisory services are provided under an investment advisory agreement between a brokerage house, a portfolio management company, a bank that does not accept deposits or other capital markets professionals and the client. The comments and recommendations contained in this presentation are based on the personal opinions of the authors. These opinions may not be appropriate for your financial situation and risk and return preferences. For that reason, investment decisions relying solely on the information contained in this presentation may not meet your expectations.