Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Audited Financial Results for the 12 months ended December 31, 2015 www.fidelitybank.ng
Slide 2: Outline
Outline 1. The Operating Environment 2. Overview of Fidelity Bank 3. Financial Highlights 4. Financial Review 5. 2015 Guidance Vs 2016 Guidance 2 www.fidelitybank.ng
Slide 3: The Operating Environment / Overview of Fidelity Bank
1. The Operating Environment 2. Overview of Fidelity Bank 3 www.fidelitybank.ng
Slide 4: Key Policy Changes in 2015 Financial Year
Key Policy Changes in 2015 Financial Year The Central Bank of Nigeria (CBN) deferred the - The CBN closed rDAS Window and devalued Naira to implementation of Oil & Gas Credit Risk Mitigation Policy that N199/$. increased the risk weight of oil & gas loans to 125% for banks - The CBN commenced FG ind
Slide 5: Recent Events & Implications
Recent Events & Implications Monetary authorities shift focus from stimulating growth to tackling inflation as MPC raises MPR rate from 11% to 12% FX pressures will still persist though there has been a gradual increase in oil prices and the hiking of monetary policy rates Interest margins are
Slide 6: 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 N1,231.7 billion Nigeria The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor
Slide 7: Financial Highlights
3. Financial Highlights 7 www.fidelitybank.ng
Slide 8: Performance Highlights
Performance Highlights Total Interest Income up by 16.2% to N121.2 billion in 2015 FY (2014 FY: N104.3 billion) Revenue Net Fee Income down by 20.8% to N23.3 billion in 2015 FY (2014 FY: N29.4 billion) and Net Interest Margin at 6.9% in 2015 FY (NIM for the 2014 FY: 6.0%) Efficiency Ratio PB
Slide 9: Financial Highlights: Income Statement 2015 FY Vs 2014 FY
Financial Highlights Summary of Income Statement: 2015 FY Vs 2014 FY N’million 2015 FY 2014 FY VAR % VAR Gross Earnings 146,891 136,094 10,797 7.9% Interest Income Loans 84,833 70,981 13,852 19.5% Interest Income Liquid Assets 36,325 33,326 2,999 9.0% Total Interest Income 121,158 104,307 16,851 16.
Slide 10: Financial Highlights: Income Statement QoQ Change
Financial Highlights Summary of Income Statement: QoQ Change N’million Q4 2015 Q3 2015 Q2 2015 Q1 2015 VAR % VAR Gross Earnings 40,030 34,680 37,061 34,829 5,350 15.4% Interest Income Loans 25,997 20,870 19,396 18,570 5,127 24.6% Interest Income Liquid Assets 10,471 7,794 9,512 8,548 2,678 34.4% Tot
Slide 11: Financial Highlights: Financial Position 2015 FY Vs 2014 FY
Financial Highlights Statement of Financial Position: 2015 FY Vs 2014 FY N’million 2015 FY 2014 FY VAR % VAR Total Assets 1,231,722 1,187,025 44,697 3.8% Earning Assets 879,855 818,994 60,861 7.4% Bank Placements 7,482 42,049 (34,567) -82.2% Treasury Bills 167,231 184,342 (17,111) -9.3% Bonds 126,93
Slide 12: Financial Highlights: Financial Position QoQ Change
Financial Highlights Statement of Financial Position: QoQ Change N’million Q4 2015 Q3 2015 Q2 2015 Q1 2015 VAR % VAR Total Assets 1,231,722 1,159,184 1,192,684 1,196,228 72,538 6.3% Earning Assets 879,855 789,058 825,327 804,752 90,797 11.5% Bank Placements 7,482 11,500 4,000 2,000 (4,018) -34.9% Tr
Slide 13: Financial Highlights – Key Notes
Financial Highlights – Key Notes Strong growth in net interest income by 24.7% on the back of improved balance sheet efficiency and rebalancing of the loan portfolio NIM improved from 6.0% to 6.9% Vs a guidance of 7%. In line with our medium term strategy we have been able to improve the NIM by
Slide 14: Financial Highlights – Key Notes
Financial Highlights – Key Notes We are commencing a Business Process Re-engineering project to redesign our processes, use automation to streamline our processes and ultimately reduce our cost to serve. Cost management is a pivotal focus for us in the 2016FY as we seek to fully benefit from the
Slide 15: Financial Review – SCI
4. Financial Review – SCI 15 www.fidelitybank.ng
Slide 16: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) 2015FY 2014FY VAR % VAR Total Earnings: 2015 FY Total Earnings: 2014 FY Total Earnings 146,891 136,094 14,199 10.4% E-banking, 5% E-banking, 2% Others, 6% Others, 5% Interest Income Loans 84,833 70,981 13,852 19.5% COT, 1% COT, 3% Int. Income Liquid Asset
Slide 17: Net Interest Margin Analysis
Net Interest Margin Analysis NIM improved each quarter from 6.0% in 2014FY to 6.9% in NIM Trend 2015FY as increased yields on earnings assets surpassed the growth in funding cost. 6.9% 6.9% The growth in yields on earnings assets was 1.1% YoY, 6.6% driven by a repricing of the loan book and the
Slide 18: E-Banking Income Analysis
E-Banking Income Analysis Disciplined implementation of our retail strategy using Quarterly Revenue Trend technology as an enabler has continued to translate to N'billion improved earnings with income from e-banking increasing by 182.4% YoY to N7.6bn from N2.7bn. 3.08 2.49 Profit margin trends u
Slide 19: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) 2015FY 2014FY VAR % VAR Total Expenses: 2015 FY Total Expenses: 2014 FY Total Expenses 64,107 54,753 9,354 17.1% Others Exp., Others Exp., Staff Cost 27,125 25,874 1,251 4.8% 33% 25% Depreciation 3,985 3,792 193 5.1% Regulatory Cost 9,267 9,267 0 0.0% Staf
Slide 20: Cost Dynamics
Cost Dynamics Total expenses increased by 17.1% YoY (48.9% QoQ), with Operating Expenses & Staff Cost branding & advertisement, staff cost, repairs and N'billion %Share maintenance, provisions for litigation and security been 66 64.1 48% the key cost drivers. 47.3% Cost to income ratio remained
Slide 21: Breakdown of Operating Expenses: 2015 FY Vs 2014 FY
Breakdown of Operating Expenses: 2015 FY Vs 2014 FY N’million 2015 FY 2014 FY VAR % VAR Branding & Advert 5,845 1,029 4,816 468.0% Staff Cost 27,125 25,874 1,251 4.8% Repairs & Maintenance 2,457 1,757 700 39.8% Corporate Finance Expenses 606 90 516 573.3% Contractor Compensation 3,533 3,045 488 16.0
Slide 22: Key Cost Drivers & 2016FY Expectations
Key Cost Drivers & 2016FY Expectations Key Cost Drivers in 2015 FY: YoY Actual Cost Increase N'billion 4.82 1.25 0.70 0.52 0.49 0.46 0.32 0.24 0.19 0.14 Branding & Staff Cost Repairs & Corporate fin. Contractor Litigations & Security Computer Depreciation Telephone Advert Maint. expenses compensatio
Slide 23: Financial Review – SFP
4. Financial Review – SFP 23 www.fidelitybank.ng
Slide 24: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2015FY 2014FY VAR % VAR Funding Structure: 2015 FY Funding Structure: 2014 FY Demand Deposits 328,549 424,397 (95,848) -22.6% Equity, Equity, Debt 17% Debt 16% Savings Deposits 119,140 97,996 21,144 21.6% Securities, 8% Demand, Securities, 5% 30% Time Depos
Slide 25: Deposits Analysis
Deposits Analysis Total deposits declined by 6.1% YoY to N769.6 billion on Customer Deposits account of regulatory directives e.g. Treasury Single Account N'billion (TSA) and NLNG dividends which impacted our deposit base 797.5 796.6 765.8 769.6 by about N175bn. However, total deposits grew by 0
Slide 26: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Savings deposits grew by 21.6% YoY while it increased by Savings Deposits Trend 12.5% QoQ. N'billion Growth was the combination of the disbursed salary 119.1 105.6 105.2 105.9 bailout funds and careful execution of our save-4-shelta savings promo target
Slide 27: Liquidity Assets Position
Liquidity Assets Position Short-term Funds Placements Treasury Bills Bonds 20.9% 0.6% 13.6% 10.3% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio % Net Loans to Customer Deposits 36.0% 75.1% 71.9% 71.5% 33.4% 68.6% 32.6% 32.2% 30.0% 30.0% 3
Slide 28: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2015 FY Vs 2014 FY N’million 2015 FY 2014 FY VAR % VAR Communication 48,298 78,237 (29,939) -38.3% Oil and Gas 147,407 144,073 3,334 2.3% - Upstream 97,568 103,451 (5,883) -5.7% - Downstream 23,430 20,822 2,608 12.5% - Services 26,4
Slide 29: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – 2015 FY N’million Q4 2015 Q3 2015 Q2 2015 Q1 2015 Real Estate, Others, 1.9% 2.9% Communication 48,298 54,584 74,675 75,215 Agriculture, 2.0% Communication Oil and Gas 147,407 155,626 166,457 149,982 Construction, , 8.
Slide 30: Loan Portfolio Analysis
Loan Portfolio Analysis QoQ/YoY Change in Loans & Advances to Customers N’million Q1 2015 Q2 2015 Q3 2015 Q4 2015 2015 FY Government (6,577) (666) 1,126 53,479 47,362 Consumer (Individuals) 9,032 (1,263) 7,610 (2,231) 13,149 Oil & Gas Services (1,256) 8,947 255 (1,337) 6,608 Power (2,136) 5,274 663
Slide 31: Net Loan Book Analysis
Net Loan Book Analysis Net loans increased by 6.7% YoY (5.6% QoQ) to N578.2 Net Loans and Advances to Customers billion driven principally by the Public Sector, consumer N'billion loans (focus on high quality employees of federal 572.8 578.2 parastatals and corporate institutions) and Oil Services
Slide 32: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2015 FY Vs 2014 FY N’million 2015 FY 2014 FY VAR YoY Growth: Loans Communication 1,919 4,186 (2,267) (29,939) Oil and gas 2,319 1,310 1,009 3,334 - Upstream 0 0 0 (5,883) - Downstream 262 519 (256) 2,608 - Services 2,056 791 1,265 6,608 Power
Slide 33: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2015 FY Vs 2014 FY 2015 FY 2014 FY N’million % Contr. % NPL N’million % Contr. % NPL Communication 1,919 7.3% 4.0% 4,186 17.2% 5.4% Oil and gas 2,319 8.9% 1.6% 1,310 5.4% 0.9% - Upstream - 0.0% 0.0% 0 0.0% 0.0% - Downstream 262 1.0% 1.1% 519
Slide 34: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – 2015 FY Real Estate, Others, 7.2% N’million Q4 2015 Q3 2015 Q2 2015 Q1 2015 Communication, 7.3% 4.6% Communication 1,919 4,168 4,202 3,883 Agriculture, Oil and gas, 2.6% 8.9% Oil and gas 2,319 1,259 1,206 1,165 Construction, Pow
Slide 35: NPL Analysis
NPL Analysis NPL remained unchanged at 4.4% as at Dec 31, 2015, Gross Loans and Advances however absolute NPL increased by 7.3% YoY (24.6% N'billion QoQ) due to weaker macro economic environment. 593.4 569.1 599.0 The major sectors that caused YoY increase in absolute 564.7 NPL were Transport, O
Slide 36: Update On Oando Group Plc Exposure
Update On Oando Group Plc Exposure Amount Loan Breakdown General Description N'bn $’mm Total exposure to Oando Group 22.4 - 33% - Oando Marketing (Downstream) 14.9 - - Oando Energy Services Ltd (Upstream) 7.5 - 67% % Contribution % of Total Loan Book 3.7% % of the Energy Loan Book 15.2% Oando Market
Slide 37: Capital Adequacy
Capital Adequacy Fidelity remains well capitalized with strong capital Capital Adequacy Ratio Computation – Basel II adequacy ratio (CAR) of 18.7% compared to the regulatory minimum requirement of 15.0%. N'million 2015 FY 2014 FY VAR Total equity increased by 6.0% YoY (1.8% QoQ) to Tier 1 Capita
Slide 38: 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: 18.2% Oil & gas upstream Oil & gas downstream 45.5% Banking Power & infrastructure Telecomm
Slide 39: Business Segment Analysis
Business Segment Analysis Corporate Banking Lagos & SW North South Revenue 45.5% 21.5% 15.1% 17.9% Corporate Banking Lagos & SW North South Deposits 18.2% 34.3% 27.2% 20.3% Corporate Banking Lagos & SW North South Loans 63.7% 9.4% 14.2% 12.7% The Loan mix between Corporate Vs Others is now 64 : 36 a
Slide 40: 2015 Guidance Vs 2016 Guidance
5. 2015 Guidance Vs 2016 Guidance www.fidelitybank.ng 40
Slide 41: Review of 2015 Guidance
Review of 2015 Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 2014 FY Actual 2015 FY Actual Revised 2015FY Target Comment 1 Net Interest Margin 6.0% 6.9% 7% Achieved 2 Tax Rate 11.1% 0.9% 15% to 20% Achieved 3 Loan Growth 27.1% 6.7% 10% Not Achieved 4 Deposit Growth 1.7% -6.1% Decline (10%
Slide 42: 2016 Guidance
2016 Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 2015 FY Actual 2016FY Target Comment Lower Yields On Liquid Assets and NIBOR Linked 1 Net Interest Margin 6.9% 6.75% -7.0% Loans 2 Tax Rate 0.9% 15% to 20% Efficient Tax Management 3 Loan Growth 6.7% 5.0% to 7.5% Controlled Loan Growth In
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