Wema Bank PLC · NSENG:WEMABANK
Wema Bank — H1 2015 Earnings Presentation
31 slides from Wema Bank's earnings presentation, July 2015
Slide 1: H1 2015 Financial Results: Facts & Figures
H1 2015 FINANCIAL RESULTS Facts & Figures July 2015 1
Slide 2: Cautionary Note Regarding Forward Looking Statements
Cautionary Note Regarding Forward Looking Statements • This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the tran
Slide 3: Contents
section page 1 Overview of Operating Environment 4 2 Financial Highlights 8 3 Outlook 24 3
Slide 4: Overview of Operating Environment
Overview of Operating Environment The Bank has been adversely impacted by developments in the operating environment • The on-going global negotiations (Iran nuclear Global developments – US Fed, Greece, Iran, discussions, Fed Tapering) have implications China. for Foreign portfolio investments • The
Slide 5: Updates on 2015 Commitments
Updates on 2015 Commitments MOTIVE TASK Growing Business • Consistent deposit growth during the year o (Customer deposit growth of 8.23% Y-o-Y; decline of 9.60% in 2015) • Increase lending to productive sectors o (Year-on-year Loan growth of 16.50%; decline of 9.86% in 2015) • Grow top line earnings
Slide 6: The Bank has been Transformed
The Bank has been Transformed The turnaround plan which commenced in 2009 has been implemented With you. All the way 2015 Perception Brand identity refreshed younger, more vibrant look Capital N45billion in Shareholders’ funds Additional Tier 1 & Tier 2 Capital planned Rating Improved CAR of 19% Agu
Slide 7: Section Page
Section Page 1 Overview of Operating Environment 4 2 Financial Highlights 8 3 Outlook 22 7
Slide 8: Financial Highlights
Financial Highlights 2015 H1 2014 FY 2014 H1 PBT ₦1.2bn ₦3.1bn ₦1.7bn PAT ~₦1.0bn ₦2.4bn ₦1.4bn Financial Highlights Capital Adequacy Ratio 18.94% 18.22% 15.80% EPS (Adjusted) 5k 6k 8k Deposits ₦234.10bn ₦258.96bn ₦216.31bn Loan book (Net) ₦134.57bn ₦149.29bn ₦115.51bn Revenue Generation Interest In
Slide 9: Comprehensive Income and Financial Position
Comprehensive Income and Financial Position 9 9
Slide 10: Earnings & Profitability Trends
Earnings & Profitability Trends Annualized Gross earnings Cost to Income Ratio 45 142.56% N‘billions 40 129.88% 35 30 95.15% 87.72% 90.40% 25 20 15 10 5 - 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Q2 (projected) 2015 2011 2012 2013 2014 (annualized) Gross earnings (₦'billions) 22.77 30.72 35
Slide 11: Revenue Base in 2015 H1
Revenue Base in 2015 H1 Interest Income 30 Interest Income 2015 Q2 Interest income (N’billions) 2015 H1 2014 H1 2014 2014 Cash and cash equivalents 0.54 0.54 1.46 Loans and advances to banks and 2014 Q2 customers 14.00 10.45 21.64 20 Investments securities 2.96 6.67 12.35 Total Interest Income 17.50
Slide 12: Continuous Effort in Cost-reduction
Continuous Effort in Cost-reduction 20 Interest Expense Interest Expense INTEREST EXPENSES (N’billions) 2015 H1 2014 2014 H1 15 Deposits from banks 0.57 0.62 0.27 ₦'billions Deposits from customers 5.77 11.80 5.45 10 Other borrowed funds 2.09 4.48 2.23 Total interest expense 8.43 16.90 7.95 5 Intere
Slide 13: Liability Structure
Liability Structure Liabilities 300 Liability Structure LIABILITIES % (N’billions) 2015 H1 2014 Change 250 Deposits from banks 3,243 3,243 0% 2015 Q2 Deposits from 200 customers 234,100 258,956 -10% ₦'billions Deriv. financial liabilities 563 419 34% 150 2014 Current tax liabilities 240 339 -29% 100
Slide 14: Deposit by Type & Mix
Deposit by Type & Mix Deposit Mix 2015 H1 2014 Savings • Deposit liabilities dropped between FY Savings 13% 2014 and H1 2015. 15% Term Term • The tight monetary policy resulted in a deposits deposits deliberate strategy to reduce expensive 40% 44% funds. This impacted on deposit volumes. Current Cur
Slide 15: Loans by Type & Category
Loans by Type & Category Loans and Advances to Customers Declining NPLs 160 ₦149bn 16.00% 14.20% ₦135bn 13.83% 140 14.00% 120 12.00% ₦99bn 10.00% ₦'billions 100 ₦74bn 80 ₦67bn 8.00% 60 6.00% 3.87% 40 4.00% 2.49% 2.90% 20 2.00% - 0.00% 2011 2012 2013 2014 2015 Q2 2011 2012 2013 2014 2015 Q2 Gross Loa
Slide 16: Credit Portfolio Analysis
Credit Portfolio Analysis Total Credit Portfolio Non-Performing Loans AUTOMOBILES 2% OTHER SECTORS GENERAL 13% COMMERCE OTHERS AGRIC TRADE 14% STEEL 5% 1% 10% GOVERNMENT ROLLING 1% 9% EDUCATION ADVERTISING REAL ESTATE 4% 6% 11% ALUMINIUM CONSTRUCTION AND ALLIED 6% OIL & GAS 16% 6% PERSONAL & REAL ES
Slide 17: Year-on-Year Improvement in Balance Sheet trends
Year-on-Year Improvement in Balance Sheet trends Total Assets Total Deposits 450 CAGR – 9.32% 300 CAGR – 9.74% 400 350 250 300 200 ₦'billions ₦'billions 250 150 200 150 100 100 50 50 - 0 2011 2012 2013 2014 2015 Q2 2011 2012 2013 2014 2015 Q2 Equity Loans and Advances to Customers 50 160 CAGR – 15.0
Slide 18: Key Performance Metrics
Key Performance Metrics 2015 – H1 2014 2013 2012 2011 (%) Net Interest Margin 7.72 8.27 7.01 6.44 6.72 Cost of Funds (%) 4.68 5.21 5.87 5.42 3.07 Loan-to-Deposit Ratio (%) 56.70 57.65 47.02 42.31 40.81 Capital Adequacy Ratio (%) 18.94 18.22 27.00 -16.00 -13.50 Liquidity Ratio (%) 33.20 32.80 76.61 6
Slide 19: Managing Risk
Managing Risk Risk Management remains at the core of our business model Impact of decline in Government Revenue on • The Bank is keeping a close eye on its Retail portfolio Credit Risk especially those tied to salaries of public servants. The reduction in Government receipts is also expected to affe
Slide 20: Risk Management Metrics
Risk Management Metrics 2015 – H1 2014 2013 2012 2011 Gross Risk Assets (₦'billion) 137.44 152.70 102.70 83.70 70.10 (₦'billion) NPL 3.98 3.79 3.98 11.89 9.70 (₦'billion) Provisions for Loan Loss 2.87 3.79 3.98 9.10 10.00 NPL Ratio (%) 2.90 2.49 3.87 14.20 13.83 NPL Coverage Ratio (%) 75.00 100.00 1
Slide 21: Section Page
Section Page 1 Overview of Operating Environment 4 2 Financial Highlights 8 3 Outlook 22 21
Slide 22: Outlook for H2 2015
Outlook for H2 2015 * Ensuring Fiscal Discipline Domestic * Appointment of Economic Management Team Fiscal Policy * Impact of CBN bailout package on State finances * Continued tight monetary policy stance Monetary * Headline Inflation expected to rise Policy * Stability of foreign exchange reserves
Slide 23: Wema Bank Growth Plan – Project LEAP
Wema Bank Growth Plan – “Project LEAP” The Bank remains committed to delivering on its medium term growth strategy Overarching Goal To Efficiently Grow Market Share in Retail & SME Target Markets GROWING MARKET SHARE IMPROVING EFFICIENCY IMPROVE NETWORK SPREAD • Seek transactions with good yields •
Slide 24: Guidance for H2 2015
Guidance for H2 2015 • Deposit growth of 10-12% p.a. expected Low cost funding • Continue to leverage mobile solutions and technology as competitive edge • Improve cost‐to‐income ratio (80%) • NPL Ratio expected at 3- 3.5% Efficiency • Cost of Risk <2% • Net Interest Margin >7.5% Alternate Platforms
Slide 25: Appendices
W WEMA BANK Appendices
Slide 26: The Bank at a Glance
The Bank at a Glance WEMA BANK PLC Listed on the Nigerian Incorporated in Nigeria in 1945 Stock Exchange in February 1991 Authorized capital of N20billion divided into 40 billion ordinary shares Diverse Fully paid up share capital is N19,287,233,041 divided into 38,574,466,082 ordinary Shareholders
Slide 27: Experienced, Skilled and Diverse Board
Experienced, Skilled and Diverse Board • Two Independent Directors • Varied experience from Banking, Industry, Law and other relevant sectors • Implementing strong governance and risk controls 1 2 3 4 5 6 7 8 9 10 11 12 13 1. Adeyinka Asekun (Chairman) 5. Wole Akinleye (ED) 10. Tina Vukor-Quarshie (
Slide 28: Geographical Coverage remains within Commercial hubs
Geographical Coverage remains within Commercial hubs Wema Bank is a Commercial Bank with Regional authorization. The Bank operates as a full-fledged Commercial Bank in two contiguous geo-political Zones and the Federal Capital Territory: The South-West (including Lagos); The South-South; Abuja
Slide 29: Our Retail Credentials – 2015 Updates
Our Retail Credentials – 2015 Updates Newer and efficient branches The Bank is building smaller and efficient branches that are quick service points for customers Strong presence in growth areas A critical target segment for the Bank are Universities and Tertiary Institutions. 29
Slide 30: Our Retail Credentials – 2015 Updates
Our Retail Credentials – 2015 Updates Growth in Alternative channels The Bank is increasing its customer base via growth in alternative platforms and electronic payments 30
Slide 31: Thank You
W WEMA BANK Thank You