Published on April 13, 2008
Slide1: MALCOLM GUEST Coface Group Country Manager Southern Africa Chief Executive Officer Coface South Africa A ‘Layman' or perhaps ‘Investors’ view: A ‘Layman' or perhaps ‘Investors’ view 2,500,000 A ‘Layman' or perhaps ‘Investors’ view: A ‘Layman' or perhaps ‘Investors’ view R 2,500,000 A ‘Layman' or perhaps ‘Investors’ view: A ‘Layman' or perhaps ‘Investors’ view April 2005 Exchange Rate Rand 10.8 to GBP 1. Investment cost (With all costs) GBP 231,481 August 2007 Exchange Rate Rand 14.5 to GBP 1. Investment value (After costs) GBP 179,310 Percentage loss on investment 22.5% Solutions: Solutions So how do we stabilise our currency and encourage investment? Solutions: Solutions Increase exports and improve our balance of payments China has a positive Trade Balance of US $251bn. Brazil has a positive Trade Balance of US $38bn India has a negative Trade Balance of US $37bn We are negative US $123bn The Economy- recent comments: The Economy- recent comments There is a very good chance that interest rates will rise again, either at the Bank’s next policy meeting in October or at the following one in December. But with a global credit crunch forcing central banks elsewhere to cut interest rates, SA may run the risk of spooking investors if it runs against the trend. The figures from Statistics SA also showed that the retail sector, the most sensitive to changes in interest rates, grew at 4,4% in the second quarter — its weakest pace in three years. Manufacturing growth slowed to 0,5% — its lowest level since 2003 when the sector was hit by a recession blamed on strength in the rand — which erodes the competitiveness of local exports and makes imports cheaper. The Economy – a “Layman’s” questions.: The Economy – a “Layman’s” questions. The questions then are:- Do interest rate hikes really control inflation ? Are too many outside factors such as the cost of oil too strong an influence on inflation? If rates are low and we borrow to buy locally produced goods or property which in turn provides employment, is that bad? If rates are lower but our currency is stable doesn’t that encourage more investment from inside and from abroad? If rates are so high that they effect our manufacturing output, does that effect our ability to export and earn the foreign currency to improve our balance of payments, or does it in effect encourage imports? The ‘Governors’: The ‘Governors’ Remember the people who govern the financial world are not governments they are traders. Unfortunately today the most influential traders do not sell goods or services they control whole markets. They are ‘financial traders’ and they act on ‘information’ . ‘Africa where’s that? It must be bad.’: ‘Africa where’s that? It must be bad.’ Solutions: Solutions Improve our communication to the rest of the World. Our best export is ‘Bad News’ Political uncertainty- linked to possible crime and corruption. Crime and the apparent inability to control it. BEE and possible land expropriation Our second best export is people BEE UK, USA, Australia all want our people. Give time limits for when no matter what his or her colour a South African is a South African! How can Coface help with exports?: How can Coface help with exports? Coface has subsidiaries or branches in 60 countries and offers local services in 93 countries through its partners in the Credit Alliance network. Coface has a world-wide database of over 50 million companies, supported by an integrated credit risk management system, and over 260 underwriters in the 60 countries mentioned to assess, insure, and review your risk. Coface can provide “information”, “Insurance”, “Collection Management”, and “Financing”. Coface can, in short, make sure that you can “Trade and get Paid” Slide13: Global service capability: direct presence in 60 countries South Africa Slide14: Global service capability: The CreditAlliance network spanning over 93 countries Who or what is Coface?: Who or what is Coface? Coface was founded in 1946 and is a subsidiary of Natixis, whose regulatory capital (tier 1) amounted to 11,2 billion euros at 31 December 2006 (R110,6 billion) Coface has subsidiaries or branches in 60 countries and offers local services in 93 countries through its partners in the Credit Alliance network. Coface South Africa was formed in September 2005 having purchased Credit Underwriting Agency Pty Ltd in January 2005. For the second year running it has been rated AAA (National Rating Scale) by Global Credit Ratings. It is a full subsidiary of Coface SA (Société Anonyme). Natixis – our parent.: Natixis – our parent. Who are they? What do they know about South Africa and in fact Africa? Two strong shareholders and high credit rating: 28 Caisses d'Epargne BFBP (Central body) CNCE (Central body) 20 Banques Populaires Float (1) : 31.2% 34.4% 100% 20% CCI 20% CCI 34.4% 100% as of 07/12/2006 Two strong shareholders and high credit rating Capital structure 20% shareholding in the retail banking networks of Banques Populaires and Caisses d’Epargne (CCI) Shareholder agreement with BFBP and CNCE (1) including DZ Bank (1,13%), San Paolo IMI (1,68%) High credit rating (AA/Aa2/AA) reflecting the bank’s strengths A new leading bank…: A new leading bank… Premium size and financial strength 15th European banking group in terms of Tier 1 Capital 4th French banking group with own funds in excess of €16 billion Market capitalisation among the top 15 on the Paris stock exchange Backed by two shareholders, Banque Populaire Group and Caisse d’Epargne Group, with combined own funds of €34 billion Contribution (direct or indirect) of both of the retail banking networks 38% contribution from retail banking to Natixis’ business Natixis NBI: €7.4 bn Group Net Income: €2.1 bn Shareholders Equity: €17.5 bn Total assets: €458.6 bn Rating: AA/Aa2/AA Banque Populaire Group + Caisse d’Epargne Group 2nd for private clients 1st for middle market companies 2nd for small businesses 27 27 29 33 34 51 10 9 Main banks in the euro zone (T1 capital in billion € as of 31/12/05) 15 e 2 e Slide19: … with key positions in France and internationally CIB Asset Management Private equity and Private banking Services Receivables management Structured financing Real estate financing: N°3 in France Aircraft financing: Top 10 worldwide Syndicated loans: N°4 French player Commodities financing Top 15 wordwide Fixed income DCM: N°4 in France Covered bonds: N°4 in Europe Structured loans CDO: Top 10 worlwide and N°1 in France Synthetic CDO: N°5 in Europe CMBS: Top 10 in US Derivatives OTC equity derivatives: Top 10 in Europe Interest rate derivatives: Top 10 in Europe Top 15 worldwide N°1 among French banks €534 bn assets under management strong expertise in fixed income, money markets, equities and real estate Private equity Among the leading banks in France on SME’s €2.3 bn assets under management Private banking A leading player: €11.4 bn assets under management Custody N°11 worldwide N°1 in France for assets deposited at Euroclear Around €2,200 bn assets in custody Employee benefits N°1 in France with 2.8 million employee accounts as of 30/06/06 Electronic banking N°1 open platform Fund administration N°1 in France N°4 in Luxembourg Trade receivables management N°2 in France N°6 worldwide Factoring N°3 in France N°7 worldwide Corporate information N°1 in France Top 7 worldwide Credit insurance N°3 worldwide Presence in 60 countries Slide20: € Million 2002 2003 2004 2005 2006 Consolidated turnover 973 1 085 1 131 1 218 1 343 Shareholders Funds 539 609 742 893 1 012 - Consolidated net profit 18,8 85,1 85,0 117 115 Key Figures Coface Group Appendix 2 - Key Figures: Appendix 2 - Key Figures Assuming double affiliation After deduction of 50% of CCI What next?: What next? This is a good country and does not deserve to be ‘tarred with the same brush’ as the rest of Africa just because we have Africa in our name! We are ‘South Africa’, the most developed and influential country in this area, if not in the continent, and if not we should be! Let us improve our economy, let us improve our currency stability, let us export. Let us help you to export.