First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — 9M 2020 Earnings Presentation
29 slides from First Holdco's earnings presentation, Sep 30, 2020
Slide 1: Forging Ahead: Investor & Analyst Presentation
FORGING AHEAD Investor & Analyst Presentation For the nine months ended 30 September 2020
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) unaudited financial statements for the nine months ended 30 September, 2020. The Group’s Financial statements represent FBN Holdings Plc and its subsidiaries. FBNHoldings has obtained some informatio
Slide 3: Outline
Outline 4 Key Highlights 9 9M 2020 Performance 20 Outlook 22 Appendix
Slide 4: Key Highlights
FBNHoldings Key Highlights
Slide 5: Key highlights for the period
Key Highlights Key highlights for the period • Strong financial • Gross earnings up 5.1% y-o-y to ₦439.3 billion performance despite the adverse macro- • Non-interest income increased by 50% year-on-year driven by fees and commissions and trading income economic situation • Focus remains on maximizi
Slide 6: Improvement in profitability while strengthening the balance sheet
Key Highlights Improvement in profitability while strengthening the balance sheet Growth, y-o-y Income Statement Snapshot Statement of Financial Position Gross Earnings Operating Income Total Assets 9M20: ₦439.3 billion 5.1% 9M20: ₦319.7 billion 10.9% 9M20: ₦7,243.2 billion 16.8% FY19: ₦6,203.5 bill
Slide 7: Resilient financial performance
Key Highlights Resilient financial performance Key Income Statement Ratios (%) Key Balance Sheet Ratios (%) Post Tax ROaE(1) Post Tax ROaA(1) Non-Performing Loans (NPL) 13.2% 9.9% 1.4% 8.8% 12.2% 1.2% 9M 19 9M 20 9M 19 9M 20 FY 19 9M 20 Net Interest Margin Cost of Funds NPL Coverage 3.3% 52.7% 7.0%
Slide 8: Solid performance within the context of a challenged operating environment
Key Highlights Solid performance within the context of a challenged operating environment Organisational Resilience Maintained earnings Consistent volume growth growth momentum Balance sheet further reinforcing leadership in through increase in non- strengthened e-banking interest income Strategic E
Slide 9: 9M 2020 Performance
FBNHoldings 9M 2020 Performance
Slide 10: Non-interest income drives Group's earnings in line with our transaction-led strategy
9M 20 Performance Non-interest income drives Group’s earnings in line with our transaction-led strategy • Gross earnings increased GROSS EARNINGS BREAKDOWN 5.1% y-o-y, (9M 2019 (9M 2019: ₦417.9bn; 9M 2020: ₦439.3bn) ₦417.9bn; 9M 2020: ₦439.3bn) 67.8% • Non-interest income up 76.5% 50% y-o-y mainly o
Slide 11: E-business revenue sustained through volume growth in a downward fee environment
9M 20 Performance E-business revenue sustained through volume growth in a downward fee environment • Non-interest income up NON-INTEREST INCOME BREAKDOWN (NET) 50% y-o-y in the first (9M 2019 ₦84.7bn; 9M 2020: ₦127.0bn) nine months of 2020 • Electronic banking remains the main contributor to non- in
Slide 12: Reining in costs as opex grows marginally and substantially below inflation
9M 20 Performance Reining in costs as opex grows marginally and substantially below inflation • As recent investments in MAIN OPEX DRIVERS new technologies taper and (9M 2019: ₦205.3bn; 9M 2020: ₦209.8bn) cost saving initiatives are institutionalized, opex has held up largely despite currency devalu
Slide 13: Maintained and continue to sustain our leadership in E-business
9M 20 Performance Maintained and continue to sustain our leadership in E-business • Continued volume and GROWING REVENUE FROM ELECTRONIC BANKING CHANNELS (₦’ MILLION) USSD BANKING MOBILE BANKING APP TRANSACTION VOLUME (MILLION) TRANSACTION VOLUME (MILLION) value growth across digital channels +27.2%
Slide 14: Confirming our leadership in Agent banking
9M 20 Performance Confirming our leadership in Agent banking as the pandemic accelerates a shift in customer behaviour • Since inception to date, the value of the transactions processed 76k (1) by agents totals CUMULATIVE AGENTS TRANSACTION COUNT ₦7.6trillion Agents FROM INCEPTION TO DATE (‘Million)
Slide 15: Well-diversified funding base driven by customer deposits
9M 20 Performance Well-diversified funding base driven by customer deposits benefiting from a strong retail franchise and network • Funding base remains FUNDING BY TYPE | FBNHOLDINGS DEPOSITS BY TYPE | FBNHOLDINGS (FY 2019: ₦6.2tr; 9M 2020: ₦7.2tr) (FY 2019: ₦4.0tr; 9M 2020: ₦4.6tr) strong and well
Slide 16: A diversified loan book with strict risk management framework
9M 20 Performance A diversified loan book with strict adherence to a disciplined risk management framework providing a resilient revenue base • Gross loan book was up FIRSTBANK (NIGERIA) GROSS LOANS BY SECTOR (FY 2019: ₦1,619bn; 9M 2020: ₦1,797bn) 10.9% year to date • Focus on the real sector, with
Slide 17: NPL ratio remains below year-end levels
9M 20 Performance Despite the difficult economic environment, NPL ratio remains below year-end levels • Asset quality remains NPL RATIO COST OF RISK NPL COVERAGE resilient with NPL ratio at 8.8% • The adverse macro environment coupled 9.9% 8.8% 3.1% 52.7% with the weaker Naira 2.6% resulted in an in
Slide 18: Rebalancing our portfolio to ensure maximum resilience
9M 20 Performance Rebalancing our portfolio to ensure maximum resilience • Given the current LOANS AND ADVANCES BY MATURITY |FIRSTBANK (NIGERIA) (FY 2019: ₦1,619bn; 9M 2020: ₦1,797bn) macro-economic situation and low- interest rate environment, the focus 47.6% 50.4% has been on short-term loans 27.9
Slide 19: Strong earnings accretive capacity ensures efficient capital
9M 20 Performance Strong earnings accretive capacity ensures efficient capital • Efficient balance sheet TOTAL RWA (₦'bn)| FIRSTBANK (NIGERIA) CAR| FIRSTBANK (NIGERIA) growth provides a solid 3,50 0 platform for sustainable 17.5% revenue base 3,00 0 3,207 3,019 15.7% 2,50 0 • Solid and increasingly
Slide 20: Outlook
FBNHoldings
Slide 21: FY 2020 – Improving performance for enhanced profitability
Outlook FY 2020 – Improving performance for enhanced profitability Enhancing Earnings Capacity Effective Cost Management Continue the transition Consolidate our towards a more leadership in the in Continuous focus on diversified transaction- digital and agent improving asset quality Strong Risk led
Slide 22: Appendix
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Slide 23: Commercial Banking Group
Appendix COMMERCIAL BANKING GROUP Well positioned for sustainable growth and profitability through customer led innovation and disciplined execution • Significantly improved KEY FINANCIAL HIGHLIGHTS balance sheet quality, as NPL ratio remains resilient at Income statement Statement of Financial Posi
Slide 24: Merchant Banking and Asset Management Group
Appendix MERCHANT BANKING AND ASSET MANAGEMENT GROUP Sustained strong performance driven by Fixed income trading, the annuity businesses (Asset Management & Trustees) and corporate banking • Strong 9M 2020 performance KEY FINANCIAL HIGHLIGHTS resulted in over 78.7% growth in y- o-y profit after tax,
Slide 25: Nigeria's operating environment remained challenging
Appendix Nigeria’s operating environment remained challenging GROSS DOMESTIC PRODUCT RATE DECLINES AMIDST RISING INFLATION REBOUND IN OIL PRICES BUT CRUDE OIL PRODUCTION CAPACITY DECREASES 1.7 1.7 1.8 1.7 1.9 1.9 1.9 15.4 1.8 1.8 1.9 13.3 13.71 11.2 11.3 11.4 11.3 11.2 11.2 12.0 12.26 1.5 1.5 2.55 4
Slide 26: Key macro economic and regulatory developments
Key macro economic and regulatory developments The CBN grants Deposit Q1 2020 GDP grew by The National Assembly The CBN recently reviewed the The Monetary Policy Money Banks leave to 1.9%; the slowest approved the revised minimum interest payable on Committee increased the consider restructuring of
Slide 27: Global Footprint
Appendix Global Footprint Nigeria France UK Ghana Guinea Senegal Name Name Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea FBNBank Senegal Type Type Type Type Type Type Licensed financial holding Bank branch Licensed bank Licensed Bank Licensed Bank
Slide 28: Definitions
Appendix Definitions ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Cost of risk computed as annualised credit impairment charges divided by the average opening and closing gross loans balances ₋ Net-interest margin computed as annualised net interest income divi
Slide 29: Contact Details
Contact Details Head, Investor Relations Tolu Oluwole : Tolulope.O.Oluwole@fbnholdings.com : +234 (1) 905 2720 Investor Relations Team : investor.relations@fbnholdings.com : +234 (1) 905 1086; 1147