Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Audited Financial Results for the 12 months ended December 31, 2016 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. 2016FY Review Vs 2017FY Guidance 2 www.fidelitybank.ng
Slide 3: 1. Overview of Fidelity Bank
1. Overview of Fidelity Bank 42 www.fidelitybank.ng 3
Slide 4: Overview of Fidelity Bank
Overview of Fidelity Bank Background Key Highlight A full service bank with International Authorisation established in 1987 and licensed by the Central Bank of Total Assets N1,298.1 billion Nigeria The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor
Slide 5: 2. The Operating Environment
2. The Operating Environment 38 www.fidelitybank.ng 3
Slide 6: The Operating Environment
The Operating Environment General Business Environment Banking Industry Specifics Nigeria’s annual output growth contracted by 1.5% The Monetary Policy Committee (MPC) kept all policy following a consecutive quarterly negative growth; this rates unchanged in its Mar 2017 meeting. marks the first
Slide 7: 3. Financial Highlights
3. Financial Highlights www.fidelitybank.ng 6 6
Slide 8: Performance Highlights
Performance Highlights Total Interest Income up by 1.6% to N123.2 billion in 2016 FY (2015 FY: N121.2 billion) Revenue Net Fee Income up by 9.6% to N25.6 billion in 2016 FY (2015 FY: N23.4 billion) and Net Interest Margin declined to 6.4% in 2016 FY from 6.9% in 2015 FY. Efficiency Ratio PBT
Slide 9: Financial Highlights
Financial Highlights Gross earnings increased by 3.5% to N152.0bn primarily due to 9.3% increase in interest income on loans and 41.3% increase in e-banking income as the bank deepens its business recruitment strategy in the retail and e-banking space. PBT declined by 21.1% due to a N4.8bn incre
Slide 10: Financial Highlights
Financial Highlights Risk assets grew by 24.2% (N139.9bn) from Dec 2015 with the devaluation of the naira accounting for 19.2% (N110.9bn) of our loan growth. The organic loan growth of 5.0% which reflects our conscious approach to increased lending activities. Cost of risk increased to 1.2% in 2
Slide 11: Pressure Point on 2016FY Profit – Staff Legacy Benefits
Pressure Point on 2016FY Profit – Staff Legacy Benefits Fidelity Bank operated two defined benefit schemes that existed prior to the introduction of the national Contributory Pension Scheme in 2004 as amended under the Pension Reform Act 2014. All employees who have spent a minimum of 5 years un
Slide 12: Financial Highlights
Financial Highlights Summary of Income Statement: 2015 FY Vs 2016 FY N’million 2015 FY 2016 FY VAR % VAR Gross Earnings 146,948 152,021 5,073 3.5% Interest Income Loans 84,833 92,715 7,882 9.3% Interest Income Liquid Assets 36,325 30,438 (5,887) -16.2% Total Interest Income 121,158 123,153 1,995 1.6
Slide 13: Financial Highlights
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2016 Q2 2016 Q3 2016 Q4 2016 VAR % VAR Gross Earnings 34,356 36,059 39,931 41,675 1,743 4.4% Interest Income Loans 20,798 20,923 26,281 24,713 (1,568) -6.0% Interest Income Liquid Assets 8,406 7,036 7,984 7,012 (971) -12.2% To
Slide 14: Financial Highlights
Financial Highlights Statement of Financial Position: 2015 FY Vs 2016 FY N’million 2015 FY 2016 FY VAR % VAR Total Assets 1,231,722 1,298,141 66,419 5.4% Earning Assets 876,023 969,925 93,902 10.7% Bank Placements 7,482 13,011 5,529 73.9% Treasury Bills 167,231 126,823 (40,408) -24.2% Bonds 123,107
Slide 15: Financial Highlights
Financial Highlights Statement of Financial Position: QoQ Change N’million Q1 2016 Q2 2016 Q3 2016 Q4 2016 VAR % VAR Total Assets 1,281,240 1,397,867 1,396,055 1,298,141 (97,914) -7.0% Earning Assets 887,688 971,521 969,396 969,925 529 0.1% Bank Placements 0 0 2,000 13,011 11,011 550.6% Treasury Bil
Slide 16: 4. Financial Review – SCI
4. Financial Review – SCI 14 www.fidelitybank.ng
Slide 17: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) 2015 FY 2016 FY VAR % VAR Total Earnings: 2015 FY Total Earnings: 2016 FY Total Earnings 146,948 152,021 5,073 3.5% E-banking, 5% Maint. Fee/COT, 1% E-banking, 7% Maint. Fee/COT, 1% Others, 5% Interest Income Loans 84,833 92,715 7,882 9.3% Others, 6% FX I
Slide 18: Change in Key Revenue Lines (YoY / QoQ)
Change in Key Revenue Lines ( YoY / QoQ) Key Revenue Lines in 2016 FY: YoY Actual Increase / (Decrease) N'billion 7.88 3.12 1.86 0.32 (0.41) (0.47) (1.33) (5.89) (0.03) Int. Income Loans E-Banking FX Income Trade Income Maintenance Remittance Dividend Income Int. Inc. Liquid Other Income Fee/COT Ass
Slide 19: Net Interest Margin Analysis
Net Interest Margin Analysis NIM declined to 6.4% in 2016FY from 6.9% in 2015FY as the NIM Trend decline in our average yield on earning assets outpaced the decline in average funding cost. 6.9% 7.3% 7.0% The yield on earning assets declined by 1.1% YoY though 6.5% 6.4% we saw an upward trajecto
Slide 20: E-Banking Income Analysis
E-Banking Income Analysis E-banking income was up by 41.3% YoY largely driven by Quarterly Revenue Trend increased international card transaction fees in H1 2016. N'billion However, the restriction on international card usage in Jun 4.85 2016 resulted in a 69.0% drop in Q3. Despite the restric
Slide 21: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) 2015 FY 2016 FY VAR % VAR Total Expenses: 2015 FY Total Expenses: 2016 FY Total Expenses 64,164 67,201 3,037 4.7% Others Exp., Staff Cost, Staff Cost 27,125 27,231 106 0.4% Others Exp., Staff Cost, 33% 42% 35% 41% Depreciation 3,985 4,308 323 8.1% Regulato
Slide 22: Cost Dynamics
Cost Dynamics Total operating expenses increased by 4.7% YoY (8.3% Operating Expenses & Staff Cost QoQ, with advert cost, electricity & diesel, deprecation N'billion % Share etc. being the key cost drivers. 75 67.2 50% 64.2 62.44 However, excluding the one-off charge of N4.8bn, total 60 45% oper
Slide 23: Cost Dynamics – Reduction On 45% Of Expense Lines
Cost Dynamics – Reduction On 45% Of Expense Lines Breakdown of Operating Expenses: 2015FY Vs 2016FY N’million 2015 FY 2016 FY VAR % VAR Branding & Advert 5,845 9,579 3,734 63.9% Depreciation 3,985 4,308 323 8.1% Energy Cost (Electricity & Diesel) 1,015 1,252 237 23.3% Consultancy expenses 407 577 17
Slide 24: Cost Optimization Impact in Q4 2016
Cost Optimization Impact in Q4 2016 Key Cost Drivers in 2016FY: YoY Actual Cost Increase N'billion 3.73 0.32 0.24 0.17 0.11 0.11 0.11 0.06 0.05 0.09 Branding & Depreciation Energy Cost Consultancy Regulatory Cost Staff Cost Repairs and Travelling and Telephone Security Advert (Electricity & expenses
Slide 25: 4. Financial Review – SFP
4. Financial Review – SFP 14 www.fidelitybank.ng
Slide 26: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2015 FY 2016 FY VAR % VAR Funding Structure: 2015 FY Funding Structure: 2016 FY Demand Deposits 328,549 469,353 140,804 42.9% Debt, 8% Equity, 16% Debt, 10% Equity, 15% Savings Deposits 119,140 155,019 35,879 30.1% Tenor Deposits 321,947 168,599 (153,348) -
Slide 27: Deposits Analysis
Deposits Analysis Total deposits increased by 3.0% YoY to N793.0 billion due Customer Deposits to 42.9% and 30.1% increase in demand and savings N'billion deposits respectively. 829.9 769.6 784.5 795.6 793.0 25.6 53.6 On a QoQ, deposits dropped marginally by 0.3% due to 54.4 70.6 63.0 48.2 96.1
Slide 28: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Savings deposits grew by 30.1% YoY which contributed Savings Deposits Trend significantly to the decline in our funding cost. N'billion The growth was as a result of the disciplined execution of 155.0 138.1 143.4 our retail banking strategy and improved
Slide 29: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 18.7% 1.0% 9.8% 8.6% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio % Total Loans to Customer Deposits 37.5% 78.8% 78.0% 36.0% 36.3% 73.3% 34.4% 66.5% 33.2% 62.8% 30.0
Slide 30: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2015FY Vs 2016FY N’million 2015 FY 2016 FY VAR % VAR Communication 48,298 43,566 (4,732) -9.8% Oil and Gas 147,407 188,217 40,810 27.7% - Upstream 97,568 136,161 38,594 39.6% - Downstream 23,430 18,591 (4,840) -20.7% - Services 26,4
Slide 31: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – 2016FY N’million 2015FY Q1 2016 Q2 2016 Q3 2016 2016FY Agriculture, Real Estate, Others, 2.2% 1.3% 3.1% Communication 48,298 50,388 52,501 48,729 43,566 Communication, Construction, 5.9% Oil and Gas 147,407 147,077 18
Slide 32: Loan Portfolio Analysis
Loan Portfolio Analysis QoQ Change in Loans & Advances to Customers N’million Q1 2016 Q2 2016 Q3 2016 Q4 2016 Power (4,765) 13,554 (217) 10,789 General Commerce (2,268) 6,147 (1,670) 8,647 Finance and Insurance 305 574 255 4,625 Oil & Gas Services 1,710 4,412 (535) 1,469 Manufacturing (3,509) 23,811
Slide 33: Loan Book Analysis
Loan Book Analysis Net loans and advances increased by 24.2% YoY (down Net Loans and Advances to Customers 1.5% QoQ) to N718.1 billion with the devaluation of naira N'billion accounting for 19.2% (N110.9bn) of the loan growth. 711.1 729.0 718.1 Excluding devaluation, real loan growth was 5.0%% Y
Slide 34: NPL Review and Impairment Charge Analysis
NPL Review and Impairment Charge Analysis There was an 89.0% growth in NPLs from N26.1bn in Breakdown of Impairment Charge – 2016FY 2015FY to N49.4bn in the 2016FY Total Impairment Charge = N8.7bn Key sectors responsible for over 90% of the NPL growth were Transport, General Commerce, Manufactur
Slide 35: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2015FY Vs 2016FY 2015FY 2016FY VAR % VAR 2015FY 2016FY N'million N'million N'million % % NPL % NPL Communication 1,919 1,492 -427 -22.2% 4.0% 3.4% Oil and gas 2,319 2,184 -135 -5.8% 1.6% 1.2% - Oil & Gas Upstream 0 - 0 0.0% 0.0% 0.0% - Oil &
Slide 36: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – 2016FY Real Estate, Others, 5.2% Communication, N’million 2015FY Q1 2016 Q2 2016 Q3 2016 2016FY 3.1% 3.0% Oil and gas, Communication 1,919 1,944 1,001 1,928 1,492 Agriculture, 4.4% 1.9% Oil and Gas 2,319 2,350 3,528 4,537 2,184
Slide 37: NPL Analysis
NPL Analysis NPL increased to 6.6% from 4.4% in 2015FY as we adopt a Gross Loans and Advances conservative approach to risk assets classification due to N'billion the relatively unstable macro environment. 736.7 757.8 743.1 25.1 34.1 49.4 Coverage ratio increased to 83.1% from 79.5% in 2015FY 59
Slide 38: Capital Adequacy
Capital Adequacy Fidelity CAR declined to 17.2% in 2016FY due to a N19.1bn Capital Adequacy Ratio Computation – Basel II charge on our Tier 1 capital being the excess charge for N'million 2015 FY 2016 FY VAR exceeding our single obligor limit due to the impact of the devaluation on an FCY Loan Tie
Slide 39: Business Segment Analysis
Business Segment Analysis Business Description Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. Revenue Deposits Loans Corporate & Investment Key focus sectors include: Oil & gas upstream Oil & gas downstream 13.6% Banking Power & infrastructure Telecommunicatio
Slide 40: Business Segment Analysis
Business Segment Analysis Corporate Banking Lagos & SW North South Revenue 44.5% 21.3% 14.8% 19.2% Corporate Banking Lagos & SW North South Deposits 13.6% 34.3% 24.7% 27.4% Corporate Banking Lagos & SW North South Loans 62.3% 8.7% 14.3% 14.7% 40 www.fidelitybank.ng
Slide 41: 5. 2016FY Review Vs 2017FY Guidance
5. 2016FY Review Vs 2017FY Guidance www.fidelitybank.ng 3
Slide 42: 2016FY Review Vs 2017FY Guidance
2016FY Review Vs 2017FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 2016FY Actual 2016FY Target Comment 2017FY Target 1 Net Interest Margin 6.4% 6.75% -7.0% Not Achieved 6.5% -7.0% 2 Tax Rate 12.0% 15% to 20% Achieved 15% to 20% 3 Loan Growth (YoY) 24.2% 5.0% to 7.5% Achieved 7.5% 4 Dep
Slide 43: 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