BancABC Half Year Financial Results August 2011

BancABC Half Year Financial Results 2011 AGENDA Highlights Economic overview Financial review Operational overview Strategy and outlook

BancABC Half Year Financial Results 2011 HIGHLIGHTS Beki Moyo

Financial Highlights 4 BancABC Half Year Financial Results 2011 Total income increased by 24 % to BWP311 million Cost to income ratio down to 72% from 77% in prior year Operating expenses up by 18% Cost to income ratio down to 72% from 77% in prior year Operating expenses up by 18% Operating profit increased by 48% to BWP67 million Pre-tax profit up by 84% to BWP63 million Attributable profit to shareholders increased by 33% to BWP37 million Basic earnings per share improved by 33% to 25.9 thebe from 19.5 thebe in 2010

Financial Highlights (cont’d) 5 BancABC Half Year Financial Results 2011

Operational Highlights 6BancABC Half Year Financial Results 2011 Total retail branches increased to 21 as of now compared to 13 in June 2010 US $50 million line of credit approved by Afrexim board Draw-down of IFC convertible loan of US$13.5m on 13 th May 2011 NPLs down from 9.4% in June 2010 to 5.5%

BancABC Half Year Financial Results 2011 ECONOMIC OVERVIEW Beki Moyo

BancABC Half Year Financial Results Economic Overview Multi-speed global economic recovery continuing amid increasing risks Increased Inflation High oil & food prices Rising demand pressures

BancABC Half Year Financial Results 2011 Economic Overview 9 Multi-speed global economic recovery continuing amid increasing risks Negative Surprises Devastating earthquake & Tsunami in Japan Unrest in the MENA region – war in Libya Debt crisis in Eurozone & US

BancABC Half Year Financial Results Economic Overview Multi-speed global economic recovery continuing amid increasing risks Economic growth somewhat subdued Unemployment remains high Worries over debt sustainability & contagion effect

BancABC Half Year Financial Results Economic Overview Multi-speed global economic recovery continuing amid increasing risks Capital inflows have been strong Currencies have appreciated Strong signs of overheating

BancABC Half Year Financial Results Economic Overview Multi-speed global economic recovery continuing amid increasing risks Economic growth has been strong High commodity prices a boon to regional countries Inflation pressures building

BancABC Half Year Financial Results 2011 Looming Financial Crisis due to Identical US - EU Debt Challenges 13 Economic Overview US was downgraded by S&P from a top-notch AAA rating to AA + Fears of Eurozone debt crisis Spreading to Italy & Spain – threat stability of € Market jittery resulting in sell-off of risky assets Investors have been seeking refuge in safe havens – Gold, Swiss Franc, etc.. Developments similar to the start of the credit crisis

BancABC Half Year Financial Results Economic Overview GDP Growth by Region

BancABC Half Year Financial Results Commodity Prices % Change Jun-10 to Jun-11

BancABC Half Year Financial Results Economic Growth (%) & Size (USD m) Economic growth from crisis induced slowdown is underway Growth in most countries is fairly close to high levels of the mid-2000s

BancABC Half Year Financial Results Economic Overview - Inflation International food prices have doubled Fuel prices have surged Inflation pressures are elevated

BancABC Half Year Financial Results GDP, Deposits & Credit Per Capita * As of Dec-10

BancABC Half Year Financial Results Policy Interest Rates Monetary Policy Tightening Monetary Policy Tightening Monetary policies broadly accommodative except in Moz

BancABC Half Year Financial Results Exchange Rate Movement vs. USD On annual basis the following currencies appreciated vs USD: MZN: 16.9% ZAR: 11.2% BWP: 7.5% ZMK: 6.1% On annual basis the following currencies appreciated vs USD: MZN: 16.9% ZAR: 11.2% BWP: 7.5% ZMK: 6.1% TZS depreciated vs USD by 14.7% Continued weakening of TZS a major cause of concern – imported inflation

BancABC Half Year Financial Results Exch. Rates Movement vs. Pula Depreciation Appreciation Jun-10 to Jun-11

BancABC Half Year Financial Results Banking Sector Status as of Apr-11

BancABC Half Year Financial Results 2011 FINANCIAL REVIEW Beki Moyo 23

BancABC Half Year Financial Results 2011 Income Statement 24 Performance primarily driven by growth in net interest income and non- interest income Impairments up due to loan growth and downgrading of security in Tanzania Opex increased in line with increased span of activity However, cost to income ratio down from 77% in 2010 to 72%

BancABC Half Year Financial Results 2011 Income Statement (USD) 25 Performance primarily driven by growth in net interest income and non-interest income Impairments up due to loan growth and continued impairment of security for NPLs in Tanzania Opex increased in line with increased span of activity However, cost to income ratio down from 77% in 2010 to 72%

BancABC Half Year Financial Results 2011 Attributable Profit Trends 26 Improvement in sustainable earnings (NII, fees and commissions) Current period profitability driven by: Higher net interest income from better margins and higher asset base Higher transactional and bond trading income Current period profitability driven by: Higher net interest income from better margins and higher asset base Higher transactional and bond trading income Profitability was negated by: Lower trading income in Zambia and Mozambique Higher effective tax rate compared to prior year Profitability was negated by: Lower trading income in Zambia and Mozambique Higher effective tax rate compared to prior year

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis 27

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis (USD) 28

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis 29 Strong growth in income other than for Mozambique and head office entities

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis 30 Income growth from both the retail and wholesale lines of business

BancABC Half Year Financial Results 2011 Income Statement – Net Interest Income 31 Positive trend in net interest income driven by better liquidity and increased balance sheet size Slight reduction in net interest margins although still high at 6.5%

BancABC Half Year Financial Results 2011 Net interest margins by entity 32 Net Interest Margin Before Impairments Net Interest Margin After Impairments

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis 33 Strong growth in NII other than from head office entities

BancABC Half Year Financial Results 2011 Income Statement – Impairments & NPLs 34

BancABC Half Year Financial Results 2011 Income Statement – Non-Interest Income 35 Substantial growth in fees and commissions as customer transactions increased Bond trading income also increased, but trading income down in Mozambique and Zambia Zimbabwe and Tanzania were main contributors to growth in non-interest income

BancABC Half Year Financial Results 2011 Income Statement – Cost to Income Ratio 36 Costs increased 18% YoY due to Retail banking expansionHowever, growth in revenues more than increase in costs. Cost to income ratio is now trending downwardsStaff cost were BWP125 million (H1 10: BWP113 million)

BancABC Half Year Financial Results 2011 Income Statement – Opex by entity 37

BancABC Half Year Financial Results 2011 Income Statement – Segmental Analysis 38 Growth in costs mostly driven by expansion into the retail and SME market segment

BancABC Half Year Financial Results 2011 Balance Sheet 39

BancABC Half Year Financial Results 2011 Balance Sheet (USD) 40

BancABC Half Year Financial Results 2011 Balance Sheet – Overview 41 23% growth in balance sheet during the last six months from BWP6bn to BWP7.4bn Deposits up 23% during the last six months Growth across all the markets Significant growth from BancABC Zimbabwe Deposits up 23% during the last six months Growth across all the markets Significant growth from BancABC Zimbabwe Loans and advances up 31% during the period Significant growth in Zimbabwe Quality of the book has improved - NPL ratio declined Loans and advances up 31% during the period Significant growth in Zimbabwe Quality of the book has improved - NPL ratio declined

BancABC Half Year Financial Results 2011 Balance Sheet – Loans and Advances 42 Growth experienced in all markets other than Tanzania

BancABC Half Year Financial Results 2011 Balance Sheet – Segmental Analysis 43 Retail contribution has significantly grown in the last 12 months

BancABC Half Year Financial Results 2011 Balance Sheet – Deposits 44 Growth in deposits experienced across the footprint Botswana still largest contributor to Group deposits Zimbabwe has second largest contribution

BancABC Half Year Financial Results 2011 Balance Sheet – Segmental Analysis 45 Retail now contributing 15% of total deposits (June 2010: 1%)

BancABC Half Year Financial Results 2011 Balance Sheet – Capital Adequacy 46

BancABC Half Year Financial Results 2011 OPERATIONAL OVERVIEW Francis Dzanya 47

BancABC Half Year Financial Results 2011 Operations Summary › 21 Retail branches as of now › Staff compliment now 48 BotswanaMozambiqueTanzaniaZambiaZimbabwe Square Fairgrounds Francistown Maputo Beira Matola Tete Chimoio Upanga Kariako Sinza (agency) Pyramid Plaza Lumumba Kitwe Ndola Mount Pleasant Heritage Abercorn Mutare Chiredzi Kwekwe 100% 94% 100%

BancABC Half Year Financial Results Operations Summary Retail rollout continuing with a target of at least 30 branches by year-end for the Group Technology has been a challenge slowing down implementation Issues being addressed and rollout of key functionality to continue Retail rollout continuing with a target of at least 30 branches by year-end for the Group Technology has been a challenge slowing down implementation Issues being addressed and rollout of key functionality to continue In-roads made into the wholesale market in all markets and microfinance in Zambia Significant reduction in Microfin rates following introduction of 48 months loans

BancABC Half Year Financial Results 2011 Operations Overview – Head Count 50

Botswana Highlights 51BancABC Full Year Financial Results 2010 Revenue increased significantly by 27%: Net interest income up 29% - stable margins and increased interest earning assets Non-interest income up 18% - higher transaction and trading income Opex up 47% from increased activity around retail expansion Tax optimisation measures reduced overall tax bill shielding impact of higher costs on profitability Customer deposits increased 1% since Dec 2010 to BWP2 billion; loans and advances increased 6% since Dec 2010 to BWP0.8 billion

BancABC Half Year Financial Results 2011 Mozambique Highlights 52 Total income down 12%: Net interest income up 31% - improved margins and increased interest earning assets However, non-interest income down 27% - lower foreign exchange trading income due to lower margins and volumes Opex up 13% from increased activity around retail expansion Deposits up 17% since Dec 2010 to BWP1 billion Loans and advances increased by 27% since Dec 2010 to BWP0.5 billion

BancABC Half Year Financial Results 2011 Tanzania Highlights 53 Net interest income up 10% owing to higher balance sheet Non-interest income increased by 72% - bond trading income major driver of growth However, impairments up 17% to BWP11.5 million Total income therefore only 45% ahead of prior year Opex increased by 35% - expansion into Retail and SME segment Deposits up 24% since Dec 2010 to BWP1 billion Loan book declined 1% since Dec 2010 to BWP0.4 billion – efforts focused more into stabilisation of book to control NPLs Funds raised mostly invested in money market investments

BancABC Half Year Financial Results 2011 Zambia Highlights 54 Total income up 11% driven primarily by growth in the microfinance net interest income NII increased by 17% - growth driven by introduction of new microfinance products and restructuring of the existing ones Wholesale banking division business growth subdued Opex increased 18% from retail footprint expansion Deposits increased 56% since Dec 2010 to BWP0.4 billion on back of improved market confidence in the bank Loan book grew in the microfinance division but was down on wholesale – overall growth 23% since Dec 2010 to BWP0.3 billion

BancABC Half Year Financial Results 2011 Zimbabwe Highlights 55 Net interest income grew 3.5 times on back of similar growth in loans and advances Non-interest income up 29% from increased transactions Portfolio impairments up from BWP1 million to BWP8 million in the current period – loan book growth Opex increased 25% due to continued expansion into the retail space Deposits increased 57% since Dec 2010 to BWP1.7 billion Loans and advances increased 68% since Dec 2010 to BWP1.5 billion PAT up 5 fold to BWP38 million Balance sheet continues growing significantly

BancABC Half Year Financial Results 2011 Zimbabwe: Share of Loans by Banking Institution 56

BancABC Half Year Financial Results 2011 Zimbabwe: Share of Deposit as of Jun-10 57

BancABC Half Year Financial Results Zimbabwe: Share of Deposit as of Jun-11

BancABC Half Year Financial Results 2011 Zimbabwe: Banks’ Capitalization Status as of 30 June

BancABC Half Year Financial Results 2011 STRATEGY AND OUTLOOK Francis Dzanya

BancABC Half Year Financial Results 2011 Short to medium term objectives 61 Grow the microfinance book in Zambia Open additional branches across the footprint Additional capital required in all subsidiaries, but BancABC Zimbabwe and BancABC Tanzania are priority Private placement route to raise additional tier I capital being explored

BancABC Half Year Financial Results 2011 Dividend declaration 62 As per Group dividend policy, an interim gross dividend of 6.8 thebe per share to be paid out on 16 th September 2011 to shareholders on register on 2 nd September 2011

Outlook 63 BancABC Full Year Financial Results 2010 Short-term prognosis points to a tough banking environment Sovereign debt problems in EU and US Increasing competition Short-term prognosis points to a tough banking environment Sovereign debt problems in EU and US Increasing competition However, countries we operate in relatively stable politically and economically These markets are growing and new opportunities exist Medium term outlook positive for Group

BancABC Half Year Financial Results 2011 THANK YOU