INVESTOR PRESENTATION FY 2020 - DTB Kenya

INVESTOR PRESENTATION FY 2020

ENRICHING LIVES

Macro Economic Highlights

Who We Are

DTB’s COVID-19 Response to Key Stakeholders

DTB’s Strategy- DTB Vision 2020

Managing Risks and Building Resilience

Remodeling the Business Pivoting to Digital

Financial Performance

Outlook

WHO WE ARE

Macro EconomicHighlights

Who We AreDTB’s COVID-19Response toKey Stakeholders

DTB’s Strategy-DTB Vision 2020

Managing Risksand Building Resilience

Remodeling the BusinessPivoting to Digital

FinancialPerformance

Outlook

DTB GROUP STRUCTURE & FOOTPRINT

4

: 67

: 39

: 51

157ATMs

2,231Employees

: 1,027

: 531

: 626

:47

134Branches

: 69

: 28

: 33

: 4

639,580Customers

: 257,997

: 221,022

: 162,749

: 2,812

as at December 2020







Outlook

5

WHAT DIFFERENTIATES DTB

Extensive product range, with growing emphasis on digital products, services and channels

Diversified distribution channels and footprint

Robust ITPlatform

Reputation for professionalism and integrity

Strong corporate governance and compliance culture underpinned by effective internal control systems

Established regional network and market knowledge covering the East African Community

Strong capital base anchored on shareholders resources and standing

Solid brand equity built over 75 years

Commitment to a sustained organisation-wide culture of service excellence.







Outlook

6

MACRO- ECONOMICHIGHLIGHTS

7

MACRO- ECONOMICHIGHLIGHTS- EAST AFRICA

GDP Growth

Exchange Rate to USD

Source: Respective Central Banks

Source: Respective Central Banks as at December

5.4%

6.8%

5.6%

4.1%

1.0%

4.5%

3.1%

1.0%

Kenya Tanzania Uganda Burundi

2019 2020(Expected)

1,846

3,704

2,288

1,915

3,702

2,298

BurundiBIF- USD

UgandaUShs- USD

TanzaniaTShs- USD

KenyaKShs- USD

2020 2019

-7.8%

+0.1%

-3.7%

-0.4%

109.21101.32







Outlook

MACRO- ECONOMICHIGHLIGHTS- KENYA

8

Source: CBK March 2021

Source: CBK (December 2020)

12 Month Private Sector Credit Growth (%)

Trend in Inflation and Central Bank Rate (%)8.25 8.25 7.25

7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00

5.787.17

5.84 6.015.33

4.59 4.36 4.36 4.2 4.845.33 5.62 5.69

4.67

Jan2020

Feb2020

Mar2020

Apr2020

May2020

Jun2020

Jul2020

Aug2020

Sep2020

Oct2020

Nov2020

Dec2020

Jan2021

Feb2021

CBR INFLATION

7.3 7.7 8.9 9.0 8.1

7.6

8.0 8.3

6.9

7.7 7.7 8.4

JAN-20 FEB-20 MAR-20 APR-20 MAY-20 JUN-20 JUL-20 AUG-20 SEP-20 OCT-20 Nov-20 Dec-20







Outlook

9

DTB’s COVID-19 RESPONSE TO KEY STAKEHOLDERS

• Committed the equivalent of over KShs 100 million to COVID support inEast Africa, of which KShs 50 million was contributed to the NationalEmergency Relief Fund in Kenya and UShs 250 million to the NationalResponse Fund in Uganda. (supporting more than 30,000 economicallyvulnerable households across East Africa).

• Boreholes built in Mombasa and Migori counties of Kenya forsustainable and safe water supply.

• KShs 5 million committed towards feeding front-line workers inpartnership with Serena Hotels for Kenyatta National Hospital andMbagathi Isolation Facility in Nairobi.

• Contributed towards the set up of the Aga Khan University Hospital fieldhospital in Nairobi and Aga Khan Hospital Infectious Diseases Unit inDar es Salaam.

Customers

Employees

Community


Supported over

30,000economically vulnerable households across East Africa







Outlook

• Repayment holidays granted for facilities valued at KShs 82 billion(37% of loan book) across the Group.

• Provided easier access to credit to MSMEs for working capital and assetpurchases under the Credit Guarantee Scheme sponsored by theNational Treasury in Kenya. DTB has committed to extend credit of upto KShs 1.6 billion to such businesses in 2021.

• Offered financial literacy training to over 120 customers.

• Waived charges on transfers from Bank account to mobile moneywallets. (Nearly KShs 120 million foregone in mobile bankingcommissions)

• Continued to pay our suppliers within 30 days from invoice for servicesrendered.

• Enhanced our mobile banking channel to support customers to transactremotely as we support efforts to ‘flatten the curve’ by introducingcontact-free banking services.

• Applied health and hygiene and social distancing protocols in DTBpremises across the region, providing a safe environment for customersamongst others.

Customers

Employees

Community


Repayment holidays granted for facilities valued at

KShs 82billion







Outlook

• Segregation of teams into different workspaces across the Group.

• Investment of KShs 34 million on staff protective equipment suchas facemasks, hand sanitisers, thermometers and PPEs at DTBworkplaces across East Africa.

• COVID-19 awareness and de-stigmatisation sessions targeting allemployees.

• Partnered with healthcare providers to offer free COVID-19testing of staff.

• Offered counseling services and psychological support to staff.

Customers

Employees

Community


Investment of

KShs 34 million on

staff protective equipment







Outlook

13

DTB’s APPROACH TO SUSTAINABILITY

DTB’s approach to sustainability involves connecting directly with people and making a lasting impact ontheir lives. DTB gives careful consideration to the impact of our business activities on the interests of ourstakeholders— customers, employees, the larger community and shareholders. We strive to createsustainable social and economic value by delivering delightful and lasting experiences to all those weinteract with.

The Bank continues to track progress in 10 of the 17 UN SDGs. More details of the same can be found onthe Bank’s website by visiting: https://dtbk.dtbafrica.com/annual-financial-reports







Outlook

https://dtbk.dtbafrica.com/annual-financial-reports

14

DTB’s Strategy-DTB VISION 2020

Our business strategy, DTB Vision 2020:➢ envisioned DTB as a ‘one- bank, one customer’ omnichannel regional bank.

➢ entailed providing seamless and consistent customer experience, across borders, through amultiplicity of channels – traditional (branches, agency banking, etc.)

➢ incorporated digital channels (enriched mobile banking and enhanced on-line banking platforms,cards, cash management solutions, digital branches, social media channels, etc.)

DTB Strategy 2030: under review and modification➢ will take into account the changing environment and customer behaviour, including the ongoing

effects of the unexpected COVID-19 pandemic and the post-pandemic business landscape.

➢ will be anchored on the improvement in the quality of lives of customers – those that DTB iscurrently serving, as well as those that are under-served.

➢ continued investment in its people, new skills, and technologies (Big Data analytics, ArtificialIntelligence (AI), robotics, cloud computing, etc) and innovation.

DTB Vision 2020

DTB Strategy 2030

Achieved

In Progress







Outlook

15

MANAGING RISKS AND BUILDING RESILIENCE

26%

18%

15%

14%

7%

6%

5%

4%3%

1%

Trade

Real Estate

Manufacturing

Tourism,restaurants and hotels

Transport & communications

Agriculture

Building & construction

Personal household

Financial services

Energy & water

Mining

SECTOR-WISE RESTRUCTURES-GROUP

16

Facilities Restructured Relating to COVID-19 (FY 2020)

• Moratorium of up to 12 months.• Extension of tenor.• Cost of restructuring absorbed by

the Bank.

37% of the loan bookrestructured in Kenya as at December 2020

Overall Loan Book

KShs 221 Bn

Facilities RestructuredKShs 82 Bn

1%







Outlook

26%

24%

16%

11%

8%

7%

6%

2%

SECTOR-WISE RESTRUCTURES-KENYA

17

Facilities Restructured Relating to COVID-19 (FY 2020)

• Moratorium of up to 12 months.• Extension of tenor.• Cost of restructuring absorbed by the Bank.

38% of the loan bookrestructured in Kenya as at December 2020

Overall Loan Book

KShs 165 Bn

22%

22%

15%

13%

8%

8%

5%

3% 3% 1%

TRADE

REAL ESTATE

TOURISM

MANUFACTURING

TRANSPORT AND COMMUNICATION

AGRICULTURE

PERSONAL HOUSEHOLD

FINANCIAL SERVICES

BUILDING AND CONSTRUCTION

ENERGY AND WATER

MINING AND QUARRYING







Outlook

Facilities RestructuredKShs 63 Bn

31%

28%

14%

9%

8%

6%

2%2%

18

SECTOR-WISE ANALYSIS OF LOAN BOOK AND NPLs-GROUP

25.7

18.5 13.5 14.8

7.2 6.5 4.3 3.2 4.8

1.2 0.3

49.6

27.3

1.4

8.6 4.9

0.1

6.0

0.2 1.3 0.6 0.0

Loans Sector-wise NPA

% of total NPA

FY 2020 (%)

FY 2019 (%)

25.7

20.1 15.9

9.9 7.3 6.5 4.5 3.7 4.9

1.4 0.2

46.5

18.4 17.4

2.4

8.4

0.0

5.3 0.1

0.4 1.2 -

Loans Sector-wise NPA

% of total NPA







Outlook

19

Provision Movement (KShs Mn)

Provision Split(KShs Mn)

BALANCE SHEET HIGHLIGHTS-GROUP

1,627

1,232

1,103

1,650

4,517

9,641

Dec-19 Dec-20

Stage 1 Stage 2 Stage 3







Outlook

20

LOANBOOK PERFORMANCE-NON PERFORMING LOANS-GROUP

NPL Movement (%)

Specific Provision/ NPLs Coverage Ratio (%)

NPL ratio stable and well below industry average.

Increase in coverage anchored on prudence and conservatism.







Outlook

12.0 12.0

14.1

6.7 7.6

10.3

1.3 0.6

3.4

7.1

8.2

11.9

FY 2018 FY 2019 FY 2020

Industr Gross NPL Ratio (Kenya) Group Gross NPL Ratio

Group COR Kenya Gross NPL Ratio

44.6

33.2

43.3

FY 2018 FY 2019 FY 2020

21

LOANBOOK PERFORMANCE-NON PERFORMING LOANS

Evolution of NPLs (Gross of Interest in Suspense ) + Coverage Ratio (Specific Provision/ NPLs Coverage Ratio) (%)







Outlook

12.9 13.3 13.9

14.6

19.7

15.9 16.6

17.5 18.0

22.8

Dec-19 Mar-20 Jun-20 Sep-20 Dec-20

Gross NPL Bank Gross NPL GroupCoverage Ratio NPL Ratio

8.2%

7.6%

8.3%

7.9%

8.6%

8.2%

8.8%

8.3%

11.9%

10.3%

34.1%

33.2%33.5%

32.0% 43.2%

41.9%

45.7%

44.4% 43.3%

43.3%

KShs

Bn

22

LOANBOOK PERFORMANCE-NON PERFORMING LOANS

Top 10 NPLs as a % of Total NPLs







Outlook

74%72% 72%

70%

83%

67%

64%62%

58%

75%

Dec-19 Mar-20 Jun-20 Sep-20 Dec-20

Bank Group

STRONG CAPITAL BUFFERS

23

Core Capital to RWA (%)

Group

Total Capital to RWA (%)Kenya

Group

Adequate capital ratios above statutory requirement

10.5 10.5 10.5

18.7 19.1

20.7

FY 2018 FY 2019 FY 2020

Kenya

Min Core Capital/RWA Core Capital /RWA

10.5 10.5 10.5

18.3 17.6 18.0

FY 2018 FY 2019 Q3 2020

Min Core Capital/RWA Core Capital /RWA

14.5 14.5 14.5

20.6 19.5 19.7

FY 2018 FY 2019 Q3 2020

Min Total Capital/RWA Total Capital /RWA

14.5 14.5 14.5

21.1 20.9 22.5

FY 2018 FY 2019 FY 2020

Min Total Capital/RWA Total Capital /RWA







Outlook

LIQUIDITY

24

Liquidity (%)

Kenya

Group

Stable liquidity levels across the Group

20.0 20.0 20.0

53.5 54.8 56.0

FY 2018 FY 2019 FY 2020

Min. Liquidity (Statutory) DTB Kenya

20.0 20.0 20.0

56.2 56.0

56.3

FY 2018 FY 2019 FY 2020

Min. Liquidity (Statutory) Group







Outlook

Draw down of USD 100 million from Development Financial Institutions:IFC- USD 50 million,AfDB- USD 40 million &DEG- USD 10 million.

25

REMODELING THE BUSINESS PIVOTING TO DIGITAL

26

CHANNEL PERFORMANCE-FY 2020

Group

of transactions done outside

branchesBranches

74% of DTB customerssubscribe to mobilebanking, up from 70%in Dec 2019.

87% of mobile bankingsubscribers use thechannel regularly, upfrom 74% in Dec 2019.

79%

POS

21%

2% ATMs

5%

of transactions done outside

branches

88%

Kenya

Branches

12%

ATMs

2%

POS

2%







Outlook

Nearly KShs 120 million foregone in mobile banking commissions.

27

DTB MOBILE

BANKING- m24/7

Using m24/7 mobile banking platform our customers can:

➢ open a Bank 24/7 digital account in under 5 minutes.

➢ make seamless payments to settle their credit card balances.

➢ worry less about security by authenticating transactions usingleading biometrics such as facial recognition.

➢ conveniently be informed of recent and upcoming transactionsthrough in-app notifications.

➢ confirm their beneficiary’s name before sending money toanother DTB customer.

➢ effortlessly book fixed deposits directly from their phonepromoting a convenient savings culture.

➢ easily conduct foreign currency internal transfers denominatedin USD, GBP and EUR.

➢ comfortably send/ receive Western Union transfers directly ontheir phones.

➢ send money to and from their DTB account effortlessly to thirdparty.







Outlook

No. of Mobile Banking (m24/7)

Transactions (Mn)

Value of m24/7 Transactions (KShs Bn)

m24/7 transaction count up by

33%

28

CHANNEL PERFORMANCE-KENYA MOBILE BANKING

46%

m24/7

transaction values up by

26.6

20.0

FY 2020 FY 2019

92.0

63.0

FY 2020 FY 2019







Outlook

Mobile Banking Transaction type (% value)

29

Nearly KShs 200 bn transferred through

the m24/7 channel from

Jan 2020 to Dec 2020

CHANNEL PERFORMANCE-KENYA

57.1%

21.8%

14.3%

6.6%

0.2%

53.9%

21.4%

13.0%11.5%

0.2%

B2B B2C FUNDS TRANSFER C2B BILL PAYMENTS

FY 2019 FY 2020

Customers deposits using mobile platforms

up by 133%






OutlookRemodeling the BusinessPivoting to Digital

30

DTB INTERNET

BANKING- i24/7Using i24/7 our internet banking platform, is a ‘walk in the

park’ experience for our customers as they can:

➢ pay their taxes real time on KRA’s iTax portal.

➢ no longer queue in long lines to pay bills to Kenya Power andNairobi Water.

➢ easily transfer foreign currency denominated in USD, GBP andEUR.

➢ transact securely with a one-time pin sent on email every timethey log in to the i24/7 portal.

➢ view accounts of related companies effortlessly on a singlescreen.

➢ get a 360 view of all the products they subscribe to, without ahitch.







No. of Internet Banking (i24/7)

Transactions (Thousands)

Value of i24/7 Transactions (KShs Bn)

31

i24/7 transactions up by

23%

CHANNEL PERFORMANCE-KENYA INTERNET BANKING

Average of 2,353transactions done per

business day on i24/7

616

503

FY 2020 FY 2019

135

110

FY 2020 FY 2019







479

437

FY 2020 FY 2019

No. of POS Acquiring Transactions(Thousands)

Value of POS Acquiring Transactions (KShs Bn)

32

POStransaction count up by

10%


POStransaction value up by

7%

2.9

2.7

FY 2020 FY 2019







708

911

FY 2020 FY 2019

No. of ATM Transactions(Thousands)

Value of ATM Transactions (KShs Bn)

33

Decline in number of ATM transactions by

22%


8.9

11.3

FY 2020 FY 2019

Increased shift in

transactions to a more cash-less economy

ATMtransaction value down by

21%







34

FINANCIAL PERFORMANCE

BALANCE SHEET HIGHLIGHTS-GROUP

35

FY 19 FY 20

KShs 199 Bn KShs 209 Bn

ASSETS

LIABILITIES

Net Loans &

Advances

5%

12%

10%

6%

KShs 131 Bn KShs 147 BnGov-Securities

KShs 386 Bn KShs 425 BnTotal Assets

KShs 280 Bn KShs 298 BnCustomer Deposits






FinancialPerformance Outlook

BALANCE SHEET HIGHLIGHTS-FUNDING, LIQUIDITY AND CAPITALGROUP

70% 73%

16%17%

7%6%

5% 3%

2% 2%

Dec-20 Dec-19

Customer Deposits Equity

Deposits from Banks Borrowings

Other Liabilities

36

Funding Capital

20.0% 20.0%

56.3%56.0%

FY 2020 FY 2019

Min. Liquidity (Statutory) Group

Liquidity

18.0% 17.6%

19.7% 19.5%

10.5% 10.5%

14.5% 14.5%

FY 2020 FY 2019

Core Capital /RWA

Total Capital /RWA

Min Core Capital/RWA (Kenya Ratio)

Min Total Capital/RWA (Kenya Ratio)






OutlookFinancialPerformance

BALANCE SHEET HIGHLIGHTS-KENYA

2

FY 19 FY 20

KShs 150 Bn KShs 155 Bn

ASSETS

LIABILITIES

Net Loans &

Advances

3%

9%

KShs 98 Bn KShs 111 BnGov-Securities

KShs 287 Bn KShs 312 BnTotal Assets

KShs 199 Bn KShs 208 BnCustomer Deposits

13%

5%







TOTAL ASSETS-SUBSIDIARIES CONTRIBUTION (%)FY 2020

38

72%

15%

12%

1%

DTB Kenya DTB Tanzania DTB Uganda DTB Burundi DTBI

0.9%

0.1%







39

NET LOAN BOOK-CONTRIBUTION BY SUBSIDIARIES

74%

17%

8%

1%

75%

16%

8%

1%

DTB Kenya DTB Tanzania DTB Uganda DTB Burundi

FY 2020 FY 2019







TOTAL DEPOSITS-CONTRIBUTION BY SUBSIDIARIESFY 2020

40

70% 13%

1%

DTB Kenya DTB Tanzania DTB Uganda DTB Burundi

16%







DEPOSIT MIXGROUPFY 2020

41

1%

9%

30%

Fixed Call Savings Current

Kenya

Group

52%

2%

13%

33%







60%

P&LHIGHLIGHTS

Net Interest Income

Kenya Group

-6%

Total Non-Interest Income 5%25%

Operating Expenses

2%

Loan Loss provision

587%12,719%

Profit before Tax (PBT)

-4%

-59% -58%

Gross Operating Income -2%

Operating Profit Before

Provisions

3%

-5%-1%

0.6%

42

Profit after Tax (PAT)-47% -52%

13.8 Bn 13.0 Bn

3.2 Bn 4.0 Bn

16.9 Bn 17.0 Bn

6.7 Bn 6.8 Bn

9.2 Bn 9.1 Bn

-42 Mn 5.3 Bn

9.3 Bn 3.8 Bn

5.7 Bn 3.0 Bn

20.1 Bn 19.3 Bn

5.5 Bn 5.8 Bn

25.6 Bn 25.1 Bn

11.9 Bn 12.3 Bn

12.3 Bn 11.7 Bn

1.0 Bn 7.0 Bn

11.3 Bn 4.7 Bn

7.3 Bn 3.5 Bn

FY 2019 FY 2020

Figures in KShs







P&LHIGHLIGHTSGROUP

43

Operating Expenses

49.1%

46.5%

45.0%

45.5%

46.0%

46.5%

47.0%

47.5%

48.0%

48.5%

49.0%

49.5%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Dec-20 Dec-19

Staff costs Other Operating Expenses Cost to Income Ratio

Credit Impairment

7,037

101

6,936

1,025

110

915

Credit Impairment General Provision Specific Provision

Dec-20 Dec-19







143.2

164.7

582.5

1,159.0

104.6

207.5

436.9

664.4

DTB Burundi

DTBI

DTB Uganda

DTB Tanzania

FY 2020 FY 2019

DTBI

P&LHIGHLIGHTS

44

Subsidiary PBT Contribution (KShs Mn)

26%

-43%

DTB Tanzania

DTB Uganda

DTB Burundi

-25%

-27%

27% of Group

PBT contributed by subsidiaries







KEY FINANCIAL RATIOS

45

Return on Equity

Kenya Group

NPL Ratio

NPL CoverageRatio

Cost to Income

Return on Asset

Fee Income Ratio

Cost of Risk

Loan to Deposit

11.5%12.8% 5.7%

2.0%2.1% 1.0%

6.9%6.3% 11.7%

34.1%43.0% 43.3%

-0.0%1.0% 3.2%

20.1%16.8% 23.7%

42.0%35.8% 40.0%

77.8%66.5% 65.9%

FY 2019FY 2018 FY 2020

12.1%13.1% 5.4%

1.9%1.9% 0.94%

6.6%6.0% 10.1%

33.2%44.6% 43.3%

0.6%1.3% 3.4%

23.5%19.7% 23.2%

46.5%44.0% 49.1%

73.6%64.4% 63.6%

Net Interest Margin 5.2%5.4% 4.7% 5.9%6.2% 5.2%







46

OUTLOOK

➢ Cautious optimism on economic rebound.

➢ Similar rate of balance sheet growth.

➢ NIMS broadly similar to 2020.

➢ Continued efforts to reduce DTB’s cost of funds.

➢ Lower interest yield.

➢ Continued focus on fee income driven by digital products and

services offerings.

➢ Overheads to be tightly controlled with gradual decline in cost to

income ratio.

➢ Cost of Risk to remain at elevated levels.







Outlook

Forward-looking statements are not statements of fact, but statements made by the Group based on our current estimates, projections, expectations, beliefs and assumptions regarding the Group’s future performance. No assurance can be given that forward-looking statements will be correct and undue reliance should not be placed on such statements. These statements, by their nature, involve risk and uncertainty, as they relate to events and depend upon circumstances that may or may not occur in the future. Factors that could cause actual future results to differ materially from those in the forward-looking statements include, but are not limited to, changes in (a) global and national economic conditions, (b) our trading environment, (c) future strategies as contained in our strategic priorities and plans included in the strategic trends, (d) interest rates, (e) credit conditions and the associated risks of lending, (f) actual cash collections, (g) gross and operating margins, (h) capital management and (i) competitive and regulatory factors. The Group does not undertake to update or revise any of these forward-looking statements publicly, whether to reflect new information or future events or otherwise. The Group does not assume responsibility for any loss or damage arising as a result of the reliance by any party thereon, including, but not limited to, loss of earnings, profits, or consequential loss or damage.

We welcome all feedback via email on [email protected]

mailto:[email protected]

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INVESTOR PRESENTATION FY 2020 - DTB Kenya

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