Dec 2010 results

BancABC Full Year Financial Results 2010
14 March 2011

AGENDA
• Highlights
• Economic overview
• Financial review
• Operational overview
• Strategy and outlook

HIGHLIGHTS
Douglas Munatsi

Financial Highlights
All banking operations
profitable for the first
time in the history of
the Group
Total income increased
39 % to BWP547
million
Operating profit
increased by 320% to
BWP111 million
Cost to income ratio
down to 77% from
82% in the prior year
Operating expenses up
by 19%
Impairment charges
on loans and advances
reduced by 69% to
BWP16 million
Basic earnings per
share improved by
15% to 46.3 thebe
from 40.4 thebe in
2009
4 BancABC Full Year Financial Results 2010

Financial Highlights (cont’d)
Balance sheet grew
by 36% from BWP4.4
billion in 2009 to
BWP6.0 billion
Loans and advances
increased by 54%
from BWP2.0 billion
to BWP3.1 billion
Customer deposits
grew by 46% from
BWP3.4 billion in
2009 to BWP4.9
billion
Net asset value per
share up from
BWP2.73 to BWP2.93
Return on average
equity was 16%
compared to 14% in
2009

Operational Highlights
Total retail branches
increased to 17 as of
now
Zimbabwe retail
division already
profitable 12 months
after commencement
Successful turnaround
of the Zambia
operation which is
now profitable
BancABC Zambia and
BancABC Zimbabwe
re-capitalised during
the year

ECONOMIC OVERVIEW
Douglas Munatsi

8
Economic Overview
Global economic
recovery has been
uneven in different
regions
Inflation on the rise due
to high oil prices
In developed countries:
•Economic growth has been
somewhat subdued
•Unemployment remains high
•Renewed fears in the Euro
zone due to high debt levels
In emerging countries:
•Capital inflows have been
strong
•Currencies have appreciated
•Early signs of overheating
In sub-Saharan Africa
(SSA)
•Economic growth has been
strong
•High commodity prices a
boon to regional countries

Economic Overview
3
-0.6
5
4.4
0.6
1.8
1.5
5.6
2.8
5
5.5
0
-2.6
2.8
3
9.6
9.2
10.3
9.6
3.7
-1.7
2.8
3.4
-4
0
4
8
12
08
09
10
11
08
09
10
11
08
09
10
11
08
09
10
11
08
09
10
11
08
09
10
11
World Euro
Area SSA USA China SA
EconomicGrowth in Selected Regions/Countries
Regions

BancABC Full Year Financial Results 2010BancABC Full Year Financial Results 2010
Economic Growth Outlook & Size of Markets (USD m)
10
Botswana
14,367
Tanzania
23,739
Malawi
5,487Kenya
36,922
Zambia
18,298
Mozambique
9,940
Zimbabwe
8,073
Lesotho
1,875
Swaziland
3,238
Namibia
11,767
0
1
2
3
4
5
6
7
8
9
10
11
30 40 50 60 70 80 90 100 110 120 130 140 150 160 170
GDPGrowth2011(%)
Ease of Doing Business- 2011 Rank
GDP Size (US$ m)= Bubble Size

2.6
6.8 6.4 6.3
2.1
4.7
-12
-10
-8
-6
-4
-2
0
2
4
6
8
10
08 09 10 11 08 09 10 11 08 09 10 11 08 09 10 11 08 09 10 11 08 09 10 11
GDP Growth
Avg Growth
Bots Moz Tanz Zamb Zimb SSA
Economic Growth in ABC Markets
11
Average economic growth for Mozambique, Tanzania,
Zambia above sub-Saharan Africa growth of 4.7%
Economic growth in Botswana suffered from effects of
Global crisis
Zimbabwe has potential for double digit growth

7,700 4,500 8,093 4,737 3,669
6,152 3,150 5,665 3,316 2,568
3,304 2,560 3,813 1,702 1,669
Loans
US$ m
Deposits
US$ m
Zimbabwe*
Botswana ZambiaTanzaniaMozambique
Assets
US$ m
ABC Markets Banking Sector Landscape
As of Oct-10
12
* As of Dec-10
Botswana Mozambique Tanzania Zambia Zimbabwe
GDP US$ m** $13,714 $9,287 $22,777 $15,687 $6,716
Deposit to
GDP
45% 34% 27% 21% 38%
* * GDP for 2010

Banking Sector Deposits and Loans
13
The markets continue
to be attractive and
have generally been
growing in the recent
past
All markets are highly
competitive
Opportunities exist to
enter new market
segments in all the
countries
The Tanzania and
Botswana markets
largest of all group
presence countries
Zimbabwe has rapidly
grown in the 2009-
2010 period

14
-10
-5
0
5
10
15
20
J-09
F-09
M-09
A-09
M-09
J-09
J-09
A-09
S-09
O-09
N-09
D-09
J-10
F-10
M-10
A-10
M-10
J-10
J-10
A-10
S-10
O-10
N-10
D-10
Annual Inflation Trends
Inflation has been broadly
stable in all markets
except Mozambique
In Mozambique, inflation
accelerated from 4.2% in
Dec-09 to 16.6% in Dec-10
due to rapid depreciation of
Metical against USD & ZAR

Interest Rate Profiles
15
4
6
8
10
12
14
16
18
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
Botswana
Prime Lending
Deposit Rate Spread
Source: Respective Central Banks
8
13
18
8
13
18
Jan-06
Jun-06
Nov-06
Apr-07
Sep-07
Feb-08
Jul-08
Dec-08
May-09
Oct-09
Mar-10
Aug-10
%
Prime Lending
Deposit Rate
Mozambique
Spread
0
4
8
12
16
20
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
%
Spread
Lending Rate
Deposit Rate
Tanzania
4
8
12
16
20
24
Jun-06
Oct-06
Feb-07
Jun-07
Oct-07
Feb-08
Jun-08
Oct-08
Feb-09
Jun-09
Oct-09
Feb-10
Jun-10
Oct-10
%
Spread
Lending Rate
Deposit Rate
Zambia

16
Exchange Rate Movement vs. USD
On annual basis the
following currencies
depreciated vs USD:
•MZN; 19.6%
•TZS; 10.8%
•K ; 3.4%
ZAR appreciated vs
USD by 10.6%
BWP appreciated vs
USD by 3.5%-12 -8 -4 0 4 8 12 16 20
BWP
ZAR
MZN
TZS
K
-3.5
-10.6
19.6
10.8
3.4
%
YoY: Dec-09 to Dec-10
Ex Rate vs USD: Appreciation (-) & Depreciation (+)
Appreciation vs USD Depreciation vs USD

BWP vs Exchange Rates
Over Dec-09 to Dec-10
the BWP appreciated
against
MZN, TZS, K, GBP, EUR, U
SD
The BWP depreciated
against ZAR & YEN by
8.0% & 9.6%
Ex Rate Movement of BWP against Foreign Currency
Depreciation Appreciation
-10 -5 0 5 10 15 20
ZAR
MZN
TZS
K
EUR
GBP
YEN
USD
-8
19.3
12.9
6.6
10.2
7.2
-9.6
3.5
%
YoY:Dec-09 to Dec-10

FINANCIAL REVIEW
Beki Moyo
18

Income Statement
19
BWP’000s 2010 % ∆ 2009
Net interest income 297,845 67% 178,394
Impairment of loans &
advances (15,826) -69% (51,218)
Net interest income
after impairments 282,019 122% 127,176
Non interest income 264,288 -0.3% 265,017
Total income 546,307 39% 392,193
Operating expenditure (435,093) 19% (365,694)
Net income from
operations 111,214 320% 26,499
Share of (loss)/profits
of associates (20,134) -225% 16,164
Profit before tax 91,080 113% 42,663
Tax (22,495) -243% 15,768
Profit for the year 68,585 17% 58,431
Attributable to:
- Ordinary shareholders 66,710 15% 58,117
- Minorities 1,875 497% 314
EPS (thebe) 46.4 15% 40.4
86 124 86 58 67
37%
42%
23%
14%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
20
40
60
80
100
120
140
2006 2007 2008 2009 2010
Attributable Profit (BWP m) and ROE (%)
Attributable profit
ROE

Income Statement (USD)
20
USD’ 000’s 2010 % ∆ 2009
Net interest income 43,873 74% 25,176
Impairment of loans &
advances (2,331) -68% (7,228)
Net interest income
after impairments 41,542 131% 17,948
Non interest income 38,930 4.1% 37,402
Total income 80,472 45% 55,350
Operating expenditure (64,089) 24% (51,610)
Net income from
operations 16,383 338% 3,740
Share of (loss)/profits
of associates (2,966) -230% 2,281
Profit before tax 13,417 123% 6,021
Tax (3,314) -249% 2,225
Profit for the year 10,103 23% 8,246
Attributable to:
- Ordinary shareholders 9,827 20% 8,202
- Minorities 276 527% 44
EPS (cents) 6.8 19% 5.7
11,868 16,597 12,560 8,202 9,827
37%
42%
23%
14%
16%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2006 2007 2008 2009 2010
Attributable Profit (USD '000) and ROE (%)
Attributable profit
ROE

Attributable Profit Trends
Improvement in quality of earnings
Current year profitability driven by:
• Higher net interest income from better margins
and higher asset base
• Lower impairments in all entities other than
BancABC Tanzania
Profitability was negated by:
• Loss in share of results of associates
• Taxation compared to prior year tax credit
21

Income Statement – Segmental Analysis
22
Attributable Profit
BWP 000’s 2010 % Cont 2009 % Cont % change
BancABC Botswana 20,040 30% 17,413 30% 15%
BancABC Mozambique 22,919 34% 30,266 52% -24%
BancABC Tanzania 15,804 24% 5,155 9% 207%
BancABC Zambia 11,203 17% (33,567) -58% 133%
BancABC Zimbabwe 27,716 41% 19,362 33% 43%
Banking operations 97,682 146% 38,629 66% 153%
Head Office (30,972) -46% 19,488 34% -259%
TOTAL 66,710 100% 58,117 100% 15%

Income Statement – Segmental Analysis (USD)
23
Attributable Profit
USD 000’s 2010 % Cont 2009 % Cont % change
BancABC Botswana 2,952 30% 2,457 30% 20%
BancABC Mozambique 3,376 34% 4,271 52% -21%
BancABC Tanzania 2,328 24% 728 9% 220%
BancABC Zambia 1,650 17% (4,737) -58% 135%
BancABC Zimbabwe 4,084 41% 2,733 33% 49%
Banking operations 14,390 146% 5,452 66% 164%
Head office (4,563) -46% 2,750 34% -266%
TOTAL 9,827 100% 8,202 100% 20%

Income Statement – Net Interest Income
24
Positive trend in net
interest income driven
by increased
margins, better liquidity
and increased balance
sheet size
Impairments were
largely under control
improving net margins
after impairments
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
2006 2007 2008 2009 2010
BWP'000
Net interest margin
Net int BWP'000 NIM before impairments NIM after impairments

Income Statement – Segmental Analysis
25
Net Interest Income (BWP’000)
2010 2009
%
change
BancABC Botswana 51,452 34,831 48%
BancABC Mozambique 29,057 38,594 -25%
BancABC Tanzania 48,038 35,178 37%
BancABC Zambia 67,331 61,632 9%
BancABC Zimbabwe 57,443 14,339 301%
Banking operations 253,321 184,574 37%
Head office 44,524 (6,180) 820%
TOTAL 297,845 178,394 67%
Mozambique affected by exchange and interest rate volatility

Income Statement – Impairments & NPLs
26
Impairment and credit
loss ratios declined
Credit losses declined
sharply owing to
improved credit risk
management
Net NPLs covered by
collateral
Overall NPLs have now
stabilised
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2006 2007 2008 2009 2010
Creditlossratio
NPLratios
NPL and credit loss ratios
Gross NPL ratio Net NPL ratio Credit loss ratio

Income Statement – Non-Interest Income
Trading income, fees and commissions now main source of non-interest income
Bulk of equity investments disposed of in 2009, hence no mark-to-market gains
Overall quality of non-interest income improving – greater portion of earnings are now recurring
27
-50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
2006 2007 2008 2009 2010
BWP'000
Non-interest income
Fees and commissions Trading income Gains on investment activities MTM - investment property Other income

Non-interest income
BWP 000’s 2010 Contribution 2009 Contribution % change
Fees and commissions 103,189 39% 84,013 32% 23%
Trading income 139,586 53% 128,997 48% 8%
Non recurring items - - 51,926 20% -100%
Other income 21,513 8% 80 0.03% 26791%
Total 264,288 100% 265,016 100% -0.3%
Income Statement – Non-Interest Income

Income Statement – Cost to Income Ratio
29
Costs have increased as retail rollout is progressing and Zimbabwe is normalising
However, cost to income ratio is declining
•To continue declining as retail income contribution increases
•Medium term target is cost to income ratio of 50%
Retail costs were 15% or BWP63 mill of total expenses (09: 9% or BWP35 mill)
Staff cost were BWP243 million (09: BWP180 million)
49% 47%
59%
82%
77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10
Cost to Income Ratio

Income Statement – Staff Costs
30
Total head count in 2010 of 668 vs 592 in 2009
Growth in staff numbers in last 12 months mainly attributable to retail expansion
337
395
450
504 475
-
-
34
88
193
-
100
200
300
400
500
600
700
800
2006 2007 2008 2009 2010
Staff compliment for the year
Wholesale Retail
337 395 484 592 668

Retail Banking CAPEX
31
USD ‘000 BWP ‘000
Branch capital expenditure 9,526 65,539
Systems roll-out 4,550 31,303
Data centre centralisation 3,478 23,926
17,554 120,768
All funded from internal resources

Balance Sheet
32
BWP '000s 2010 2009 % change
Cash and short term funds 999,338 881,884 13%
Financial assets held for trading 1,117,827 880,740 27%
Financial assets designated at fair value 79,139 17,905 342%
Loans and advances 3,078,110 1,995,325 54%
Property and equipment 330,218 278,975 18%
Other assets 406,809 362,916 12%
TOTAL ASSETS 6,011,441 4,417,745 36%
Deposits 4,907,045 3,355,118 46%
Borrowed funds 579,420 543,822 7%
Other liabilities 87,116 103,026 -15%
Total liabilities 5,573,581 4,001,966 39%
Equity attributable to ordinary shareholders 422,337 399,069 6%
Minority interest 15,523 16,710 -7%
Total equity 437,860 415,779 5%
TOTAL EQUITY AND LIABILITIES 6,011,441 4,417,745 36%

Balance Sheet (USD)
33
USD '000s 2010 2009 % change
Cash and short term funds 154,997 132,194 17%
Financial assets held for trading 173,375 132,023 31%
Financial assets designated at fair value 12,274 2,684 357%
Loans and advances 477,415 299,099 60%
Property and equipment 51,217 41,818 22%
Other assets 63,097 54,401 16%
TOTAL ASSETS 932,375 662,219 41%
Deposits 761,083 502,932 51%
Borrowed funds 89,868 81,519 10%
Other liabilities 13,512 15,443 -13%
Total liabilities 864,463 599,894 44%
Equity attributable to ordinary shareholders 65,504 59,820 10%
Minority interest 2,408 2,505 -4%
Total equity 67,912 62,325 9%
TOTAL EQUITY AND LIABILITIES 932,375 662,219 41%

Balance Sheet – Overview
34
36% growth in balance
sheet from BWP4.4bn to
BWP6bn
Deposits up 46%
• Growth across all the markets
• Significant growth from BancABC
Botswana and BancABC
Zimbabwe
Loans and advances up
54%
• Significant growth in Zimbabwe
as economy stabilised
• Focus during the year for
Tanzania was mostly on
collections

Balance Sheet – Loans and Advances
35
BancABC Zimbabwe now largest
contributor to Group’s loan book
Lower growth experienced in other
markets
Compounded annual growth rate
of 34%
BancABC
Botswana
26%
BancABC
Mozambique
14%
BancABC
Tanzania
15%
BancABC
Zambia:8%
BancABC
Zimbabwe:32
%
ABCH & Other
6%
Loans
941
1,247
2,250
1,995
3,078
-
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010
Net Loans and Advances (BWP m)

Balance Sheet – Deposits
36
Growth in deposits across
footprint, CAGR = 32%
Additional funds generated
invested in loans and
money market instruments
BancABC Botswana still the
largest contributor
BancABC Zimbabwe second
largest contribution
BancABC
Botswana:40%
BancABC
Mozambique:17%
BancABC
Tanzania:16%
BancABC
Zambia:5%
BancABC
Zimbabwe:22%
Deposits
1,595
1,962
2,822
3,355
4,907
-
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010
Deposits (BWP m)

Balance Sheet – Capital Adequacy
37
Total Equity (BWP m) Capital Adequacy Ratio
Subsidiary 2010 2009 Min 2010 2009
BancABC Botswana 171 160 15% 18% 23%
BancABC Mozambique 162 145 8% 24% 17%
BancABC Tanzania 97 96 12% 15% 23%
BancABC Zambia 86 42 10% 21% 10%
BancABC Zimbabwe 191 102 10% 21% 20%
All entities are adequately capitalised

OPERATIONAL OVERVIEW
Francis Dzanya
38

Operations Summary
› 17 Retail branches as of now
› Staff compliment now
39
Square
Fairgrounds
Francistown
Maputo
Beira
Matola
Tete
Chimoio
Upanga
Kariako
Pyramid Plaza
Lumumba
Kitwe
Mount Pleasant
Heritage
Abercorn
Mutare
ABCH Group
693 Employees
Botswana
BancABC
Botswana
106 Employees
Mozambique
BancABC
Mozambique
102 Employees
Tanzania
BancABC
Tanzania
81 Employees
Zambia
BancABC
Zambia
125 Employees
Zimbabwe
BancABC
Zimbabwe
232 Employees
South Africa
100% 100% 81% 100% 100%
BancABC South
Africa
47 Employees
100%

Improved quality of loan book
Net impairment charge was low
Non-performing loans down from prior year
High collections on previously impaired accounts
40
Net
Impairment
charge
Down Down 77% to
BWP2m
Up 41% to
BWP18m
Down Down
› Overall improvement of loan book
Operations Summary

› All subsidiaries adequately capitalized
› Mozambique additional tier I capital of US $3m and tier II
capital of US $2m
› Zambia additional tier I capital of US $5m and tier II
capital of US $1m
› Zimbabwe additional tier I capital of US $10m
41
Operations Summary

Botswana Highlights
PAT improved 20% to BWP21m
• Increased profitability driven by higher net interest income:
• Improved margins and increased interest earning assets
• NII increased 48% to BWP51m
• Non-interest income declined by 22% to BWP17m following
reduction in forex trading volumes and margins
• Operating expenses increased 27% to BWP59m – retail expansion
Balance sheet increased 30%, customer deposits
increased 40% to BWP2b; funds invested in loans and
money market instruments

Mozambique Highlights
PAT of BWP23m, 24% lower than
prior year
• Lower income due to lower margins and heavy
depreciation of Meticais against BWP and USD
• Expense growth lower at 6% even with retail
expansion mainly due to currency depreciation
Growth in balance sheet subdued

Tanzania Highlights
Despite increased impairment and operating
expenses, PAT increased 207% to BWP16m
• Expenses increased 18% to BWP48m mostly from retail
expansion related costs
• Non-interest income increased 40% to BWP38m from
increased forex transactions and bond trading
BancABC Tanzania’s liquidity position improved
significantly leading to higher net interest income
• Deposits grew 18% to BWP0.8bn
• Loan book declined 8% to BWP0.4bn
• Excess liquidity invested in money market instruments
• Margins higher due to low funding rates for most of the year

Zambia Highlights
PAT of BWP11m compared to a loss of BWP34m in prior
year
• Operating expenses increased 5% to BWP80m
• Costs tightly managed
• Synergies from the merge of the bank with Microfin
• Net recovery of BWP3m compared to a net impairment charge of
BWP27m in prior year
Balance sheet now better structured:
• Deposits increased 21% to BWP253m
• Cost of funds declined resulting in higher margins
• Loan book down 22% to BWP233m, efforts were devoted to collections
• Net interest income up by 9% to BWP67m

Zimbabwe Highlights
PAT up 38% to BWP27 mill
• Expenses up 71% to BWP107m due to industry-wide staff
costs increase and retail expansion
• Bank’s income increased 93% to BWP140m
Subsidiary grew its balance sheet significantly:
• Deposits increased 316% to BWP1.1bn
• Loans and advances increased 810% to BWP0.9bn
• Transaction flows have also increased
• Combined effect was to increase subsidiary’s income

STRATEGY AND OUTLOOK
Douglas Munatsi

Follow up on 2010 Objectives
48
Grow & Diversify
Customer Base
Increase Non-Interest
Income
Reduce Impairments
Boost Net Interest
Income
Control Operating
costs
Reduce cost of
Funding
Invest for growth
› Merge Microfin and Zambian ops and cross sell
› Convert wholesale banking customers to retail
bank
› Expand Retail Banking business
› Cross sell products to borrowing customers
› Improved credit management
› Managed growth of the loan portfolio
› Costs driven by incremental revenue potential
› Improve turnaround times
› Expansion of Retail Banking footprint
› Invest in human capital
› Retain a substantial amount of Group‘s earnings
OBJECTIVE STRATEGIC ACTIVITIES RESULTS
On-going
Achieved, but results
lagging in Tanzania
On-going
Cost to Income ratio
On-going
On-going
Merger successfully
closed, rollout of retail
products on-going

2011 Objectives
49
Grow & Diversify Customer
Base
Increase Non-Interest Income
Reduce Impairments
Boost Net Interest Income
Control Operating
costs
Reduce cost of
Funding
Manage investment in
Growth
› Increase both wholesale and retail customer numbers
› Embed Retail Banking business
› Cross sell products to borrowing customers
› Improved credit management
› Managed growth of the loan portfolio
› Costs driven by incremental revenue they can generate
› Improve turnaround times
› Embed Retail Banking rollout across footprint
› Invest in human capital
› Retain a substantial amount of Group‘s earnings
OBJECTIVE STRATEGIC ACTIVITIES On-going

Dividend declaration
50
A final dividend of 10 thebe per share to be paid
out to shareholders on register on 1 April 2011

Outlook
51
Economies generally stable
in operating countries
Downside risks exist :
• Unrest in Middle East and North
Africa
• Debt crisis in Europe
• Risk of price bubbles in China
• Quantitative easing and other
stimulus packages
Retail rollout to continue
until fully embedded in all
subsidiaries
Group to also continue
growing wholesale division
Impairments largely under
control; results in Tanzania
to show in the near future
Sustained dividend
payments going forward

THANK YOU

Dec 2010 results

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Dec 2010 results