Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — 9M 2020 Earnings Presentation
36 slides from Fidelity Bank's earnings presentation, Sep 30, 2020
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Unaudited Financial Results for the 9 months ended September 30, 2020 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. 9M 2020 Actual Vs. 2020FY Guidance 2 www.fidelitybank.ng
Slide 3: 1. Overview of Fidelity Bank
1. Overview of Fidelity Bank www.fidelitybank.ng 3 3
Slide 4: Overview of Fidelity Bank
Overview of Fidelity Bank Ownership 32.0bn Authorized Shares Listings: 28.96bn Shares Total Assets: N2,575bn Issued And 28.96bn Fully Paid $6.7bn 7yr N30bn May 2022 NGN Bonds $400m Oct 2022 Eurobond Professional Staff 2,853 837 ATMs Male: 55% Operations 5.5 Million Female: 45% & Accounts 2.3m Cards
Slide 5: Overview of Fidelity Bank: Retail and Digital Banking Evolution
Overview of Fidelity Bank Retail And Digital Banking Evolution / Progress Report Number of Customer Accounts (#’m) Savings deposits (N’bn) Retail Risk Assets (N’bn) 5.3 5.5 385.1 57.2 53.8 53.4 4.5 44.8 3.9 275.2 3.6 37.6 228.0 178.6 155.0 2016 2017 2018 2019 9M 2020 2016 2017 2018 2019 9M 2020 2016
Slide 6: 2. The Operating Environment
2. The Operating Environment 6 www.fidelitybank.ng 3
Slide 7: The Operating Environment
The Operating Environment Economic activities are Rising activities in the private gradually improving post sector is boosting consumer loans lockdown Improving opportunities in select sectors as the #EndSARS protests have economy recovers spiked political risk Declining yields have forced Naira sti
Slide 8: 3. Financial Highlights
3. Financial Highlights v 810 www.fidelitybank.ng 3
Slide 9: Financial Highlights
Financial Highlights Gross Earnings dropped by 3.7% YoY to N155.0bn in 9M 2020 largely due to 2.0% YoY decline in interest income caused by lower yields in the market. However, the drop in average funding cost to 4.0% from 6.3% in 2019FY translated to N16.8bn (28.8%) increase in net interest incom
Slide 10: Performance Highlights
Performance Highlights Net Interest Income up by 28.8% to N75.0 billion in 9M 2020 (9M 2019: N58.2 billion) Revenue Operating Expenses up by 5.8% to N63.8 billion in 9M 2020 (9M 2019: N60.3 billion) and Cost to Income Ratio dropped to 66.3% in 9M 2020 from 73.4% in 2019FY Efficiency Ratio PB
Slide 11: Financial Highlights: Income Statement YoY
Financial Highlights Summary of Income Statement: YoY Change N’million 9M 2019 9M 2020 VAR % VAR Gross Earnings 161,055 155,030 (6,024) -3.7% Interest Income Loans 98,560 96,921 (1,639) -1.7% Interest Income Liquid Assets 36,556 35,548 (1,008) -2.8% Total Interest Income 135,116 132,469 (2,647) -2.0
Slide 12: Financial Highlights: Income Statement QoQ
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2020 Q2 2020 Q3 2020 VAR % VAR 51,159 54,596 49,275 (5,321) -9.7% Gross Earnings Interest Income Loans 32,340 31,373 33,208 1,835 5.8% Interest Income Liquid Assets 11,586 12,323 11,639 (684) -5.6% Total Interest Income 43,926
Slide 13: Financial Highlights: Financial Position YTD
Financial Highlights Statement of Financial Position: YTD Change N’million 2019FY 9M 2020 VAR % VAR Total Assets 2,114,037 2,575,198 461,161 21.8% Earning Assets 1,474,252 1,703,347 229,095 15.5% Bank Placements 55,812 53,615 (2,197) -3.9% Treasury Bills 183,363 211,073 27,710 15.1% Bonds 108,103 16
Slide 14: Financial Highlights: Financial Position QoQ
Financial Highlights Statement of Financial Position: QoQ Change N’million 2019FY Q1 2020 H1 2020 9M 2020 VAR % VAR Total Assets 2,114,037 2,246,788 2,403,234 2,575,198 171,964 7.2% Earning Assets 1,474,252 1,522,752 1,578,092 1,703,347 125,255 7.9% Bank Placements 55,812 57,133 70,443 53,615 (16,82
Slide 15: Gross Earnings Analysis
Gross Earnings Analysis N’million 9M 2019 9M 2020 VAR % VAR Total Earnings: 9M 2019 Total Earnings: 9M 2020 Trade, 1% Maint. Fee, 1% Trade, 1% Total Earnings 161,055 155,030 (6,024) -3.7% Maint. Fee, 2% Others, 6% Digital, 3% Others, 4% Interest Income Loans 98,560 96,921 (1,639) -1.7% Digital, 4% F
Slide 16: Net Interest Margin Analysis
Net Interest Margin Analysis NIM improved to 6.3% from 6.2% in 2019FY, largely due to NIM Trend 230bps drop in average funding cost despite a drop in yields on earnings assets. 6.6% 6.4% 6.3% 6.0% 6.2% Drop in average funding cost was due to a combination of 300pbts decline in average cost of de
Slide 17: Total Expense Analysis
Total Expense Analysis N’million 9M 2019 9M 2020 VAR % VAR Total Expenses: 9M 2019 Total Expenses: 9M 2020 Total Expenses 60,283 63,790 3,507 5.8% Others Exp., Staff Cost, Others Exp., Staff Cost, 36% 28% 33% 29% Staff Cost 17,013 18,620 1,607 9.4% Depreciation 3,889 4,573 684 17.6% NDIC/AMCON Cost
Slide 18: 4. Financial Review - SFP
4. Financial Review - SFP v v 818 www.fidelitybank.ng 3 8
Slide 19: Funding Base Analysis
Funding Base Analysis N’million 2019FY 9M 2020 VAR % VAR Funding Structure: 2019FY Funding Structure: 9M 2020 Demand Deposits 691,610 763,743 72,133 10.4% Debt, 9% Equity, 12% Debt, 8% Equity, 11% Savings Deposits 275,219 385,080 109,861 39.9% Tenor Deposits 258,384 349,596 91,212 35.3% Other Borrow
Slide 20: Deposits Analysis
Deposits Analysis Total customer deposits increased by 22.3% YTD to N1,498.4bn Total Deposits from N1,225.2bn in 2019FY. N’billion 23.6% 23.6% 23.7% 21.4% 21.2% While actual growth was 20.9%, the impact of FX rate 1,498.4 adjustment accounted for 1.4% growth in deposits. 1,352.3 1,405.9 1,225.2
Slide 21: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Savings deposits grew by 39.9% YTD and now represent Savings Deposits Trend 25.7% of total deposits from 22.5% in 2019FY. N’billion 22.3% 22.5% 23.1% 25.9% 25.7% Savings deposits accounted for 45.0% of the growth in the local currency deposits in 9M 202
Slide 22: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 29.7% 2.1% 8.2% 6.5% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio Gross Loans to Funding Ratio 35.0% 35.0% 68.4% 68.2% 66.0% 65.9% 64.5% 32.6% 32.1% 31.6% 30.0% 30.0
Slide 23: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2019FY Vs. 9M 2020 N’million 2019FY 9M 2020 VAR % VAR Communication 32,416 30,548 -1,868 - 5.8% Oil and Gas 244,799 324,884 80,086 32.7% - Upstream 132,860 152,278 19,417 14.6% - Downstream 52,203 92,736 40,533 77.6% - Services 59,7
Slide 24: Loan Portfolio Analysis by Currency
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers by Currency N’million FCY LCY Total % FCY % LCY Communication 1,557 28,992 30,548 0.3% 3.7% Oil and Gas 237,443 87,441 324,884 42.8% 11.2% - Upstream 151,285 993 152,278 27.3% 0.1% - Downstream 31,910 60,826 92,736 5.8% 7.8% - Servic
Slide 25: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – 9M 2020 Construction, Agriculture, Others, 5.1% N’million 2019FY Q1 2020 H1 2020 9M 2020 3.0% 3.0% Communication, Communication 32,416 30,121 31,521 30,548 Oil & Gas: 2.3% Oil and Gas 244,799 281,720 309,576 324,884 S
Slide 26: Loan Book Analysis
Loan Book Analysis Net loans & advances increased by 12.9% YTD to Net Loans and Advances to Customers N1,272.5bn, with 84.1% of the loan book in term loans. N’billion 56.4% 58.8% 57.0% 54.3% 56.2% Actual real loan growth was 10.2% while the adjustment in 1,209.1 1,272.5 exchange rate from N364.7
Slide 27: Loan Book Breakdown – Stage 1|2|3
Loan Book Breakdown – Stage 1|2|3 Breakdown of Loans & Advances to Customers N’million Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Communication 24,428 3,138 2,982 30,548 80.0% 10.3% 9.8% 2.3% Oil and Gas 199,496 105,536 19,852 324,884 61.4% 32.5% 6.1% 24.3% - Upstream 85,722 66,556
Slide 28: NPL Analysis
NPL Analysis NPL ratio (Stage 3 Loans) increased to 4.7% in 9M 2020 from Gross Loans and Advances 3.3% in 2019FY due to 63.2% increase in absolute NPL book N'billion to N63.1bn. 1,267.3 1,334.6 1,178.4 1,218.9 NPL growth is primarily due to the early identification of 1,126.5 63.1 58.1 61.3 38.6
Slide 29: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2019FY Vs. 9M 2020 2019FY 9M 2020 VAR % VAR 2019FY 9M 2020 N'million N'million N'million % NPL Ratio NPL Ratio Communication 1,198 2,982 1,784 148.8% 3.7% 9.8% Oil and gas 15,336 19,852 4,516 29.4% 6.3% 6.1% - Oil & Gas Upstream 175 - (175) -
Slide 30: NPL Portfolio Analysis by Currency
NPL Portfolio Analysis Breakdown of Non-performing Loans by Currency N’million FCY LCY Total % FCY % LCY Communication - 2,982 2,982 0.0% 5.4% Oil and Gas 3,974 15,878 19,852 54.0% 28.5% - Upstream - - - 0.0% 0.0% - Downstream 3,896 15,220 19,116 52.9% 27.3% - Services 78 658 736 1.1% 1.2% Power - -
Slide 31: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – 9M 2020 Others, 12.4% Communication, Power, 0.0% N’million 2019FY Q1 2020 H1 2020 9M 2020 4.7% Construction, Oil & Gas: Communication 1,198 3,291 4,014 2,982 2.8% Upstream, 0.0% Oil and Gas 15,336 16,161 19,309 19,852 Oil & Gas:
Slide 32: Capital Adequacy
Capital Adequacy Fidelity CAR is currently at 18.2% which is well above the Capital Adequacy Ratio Computation – Basel II regulatory minimum requirement of 15.0%. N‘billion 2019FY 9M 2020 VAR Excluding the regulatory adjustment, CAR would have come in at 19.5%. Tier 1 Capital 191.7 204.4 12.7
Slide 33: Strategic Business Units Analysis
Strategic Business Units Analysis Business Description Location Based Analysis Handles the bank’s institutional clients with turnover in excess of ₦5.0 billion and treasury PBT Deposits Loans business Corporate & Investment Key focus sectors include: 13.7% Banking Treasury Conglomerates 45.7
Slide 34: 5. 9M 2020 Actual Vs. 2020FY Guidance
5. 9M 2020 Actual Vs. 2020FY Guidance 34 www.fidelitybank.ng 3
Slide 35: 9M 2020 Actual Vs. 2020FY Guidance
9M 2020 Actual Vs. 2020FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 9M 2020 Actual 2020FY Target Comment 1 Net Interest Margin 6.3% 5.5% - 6.0% On Track 2 Tax Rate 4.4% 10.0% – 15.0% On Track 3 Loan Growth (YTD) 12.9% 5.0% - 7.5% On Track 4 Deposit Growth (YTD) 22.3% 5.0% - 10.0% On T
Slide 36: Thank You
Thank You Fidelity Bank Plc 2 Kofo Abayomi Street, Victoria Island, Lagos, Nigeria +234 (01) 4480853 info.investor@fidelitybank.ng www.fidelitybank.ng www.fidelitybank.ng