First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — 9M 2014 Earnings Presentation
34 slides from First Holdco's earnings presentation, November 2014
Slide 1: Connected: Growth through connected solutions
Connected Growth through connected solutions Nine months ended September 2014 Investor & Analyst Presentation
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or the ‘Group’ or ‘HoldCo’) unaudited IFRS results for the nine months ended 30 September, 2014. The Group's accounts have been prepared using the accounts of the subsidiaries and businesses within FBN Holdings. When we use the term
Slide 3: Outline
Outline Overview & Operating Environment Pg 5 - 8 Pg 9 - 17 Financial Review Pg 18 - 20 Business Groups Pg 22- 26 Outlook Pg 28 - 39 3
Slide 4: Overview & Operating Environment
Overview & Operating Environment 4
Slide 5: Stable macroeconomic environment although yields remain under pressure
Stable macroeconomic environment although yields remain under pressure OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Impact on FBN Holdings • Fitch and S&P re-affirmed Nigeria’s BB- rating with a stable and negative outlook respectively • Real GDP growth estimated at 7.1% in 2014 (FY 20
Slide 6: Positioned for growth notwithstanding regulatory changes
Positioned for growth notwithstanding regulatory changes OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Refocusing our business model leveraging on our market leadership position • Total assets of N4.2tn (+14.8% vs. 9M 2013, +8.3% y-t-d, +5% q-o-q). Net loans of N2.0tn (+25.8% vs. 9M 201
Slide 7: Improving business momentum
Improving business momentum OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income (Nbn) Cost to income ratio 300.3 295.6 64.4% 62.6% 70.7% 66.0% 64.7% 64.3% 63.2% 90.1 77.8 79.4 69.9 71.6 2012 2013 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Annual 2012 Annual 2013 Q3 13 Q4 13 Q1 14 Q214 Q3
Slide 8: Financial Review
FBNHoldings Financial Review
Slide 9: 9M 2014: Overview of income statement
9M 2014: Overview of income statement OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Snapshot: Income Statement Nbn 9M 13 9M 14 y-o-y Q2 14 Q3 14 q-o-q • 12.5% y-o-y growth in gross earnings to N333.2bn (9M 2013 N296.3bn). This was largely attributable to growth in interest income from l
Slide 10: 9M 2014: Overview statement of financial position
9M 2014: Overview statement of financial position OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Snapshot: Statement of financial position Balance sheet structure - September 2014 (Nbn) (Nbn) 9M 13 FY 13 9M 14 y-o-y y-t-d N4,191 [N3,871] N4,191 [N3,871] Other assets 3.8% [2.8%] Total Ass
Slide 11: Healthy low-cost deposits provide stable funding
Healthy low-cost deposits provide stable funding OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Deposits by SBU Nbn Deposits by type Nbn (FirstBank - Nigeria only) Retail banking Private banking Corporate banking Commercial banking Current accounts Savings accounts Term deposits Domicili
Slide 12: Capital and liquidity positions remain above regulatory limits
Capital and liquidity positions remain above regulatory limits OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Components of capital (Nbn) Evolution of capital and liquidity ratios (Commercial banking group) (Commercial banking group) Tier 1 Capital Tier 2 Capital2 Total RWA (N'bn) Tier 1
Slide 13: Evolution of 9M 2014 profit after tax
Evolution of 9M 2014 profit after tax (Nbn) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 9M 2014 9M 2013 6.9% 18.7% 37.2% 10.4% 15.4% vs. 9M ROaE 15.4% 17.8% 2013 ROaA 1.8% 2.3% 255.7 79.2 2.2% 14.9% 45.0% 5.2% 5.9% 65.0% 70.8 247.3 160.8 86.5 13.4 0.6 73.7 18.1 55.6 Interest Interest
Slide 14: Sustainable growth in revenue generation
Sustainable growth in revenue generation OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings (Nbn) Interest Income Non Interest revenue • Gross earnings increased by 12.5% benefitting from higher interest income from loans & advances to customers (+16.0%), and supported by 12.5
Slide 15: Yields pressured following increased reserve requirement but stabilises at lower levels
Yields pressured following increased reserve requirement but stabilises at lower levels OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 1 Net interest margin (NIM) • Interest income recorded a y-o-y growth of 6.9%, tempered by an 18.7% growth in interest expense resulting in a net interes
Slide 16: Regulatory costs remain one of the major drivers of cost growth
Regulatory costs remain one of the major drivers of cost growth OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income and expenses (Nbn) • Opex increased 15.4% y-o-y to N160.8bn in 9M 2014, driven by Operating income Operating expenses Cost to Income Ratio higher regulatory cos
Slide 17: Steady increase in the loan book with improved interest earning mix
Steady increase in the loan book with improved interest earning mix OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Interest earning assets mix (Nbn) FBN Holdings gross loans (Nbn) Interbank Treasury Bills Net Loans and Overdraft Bonds FirstBank Other entities Growth rate (per quarter) N3
Slide 18: FirstBank - Nigeria only (Loan book breakdown)
FirstBank - Nigeria only (Loan book breakdown) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 7 Breakdown of gross loans by SBU Gross Loans - Breakdown by Sectors Manufacturing 11% [11%] Institutional banking Retail banking Public sector Corporate banking Commercial Banking Private banki
Slide 19: FBN Bank UK – Continued improvement in performance
FBN Bank UK – Continued improvement in performance OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Selected financial summary Loan book by sector 2% Agriculture, Forestry and Fishing N‘bn 9M 13 9M 14 y-o-y Q3 13 Q3 14 y-o-y 8.1% [12.1%] 8% Manufacturing 28.1% [34.2%] Gross Earnings 17,287
Slide 20: Robust and effective credit risk management system and framework
Robust and effective credit risk management system and framework OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Asset quality (FBN Holdings) Evolution of credit impairments (FBN Holdings) NPL N’bn NPL coverage (including statutory credit reserve) NPL coverage (excluding statutory credit
Slide 21: Performance Review - Business Groups
Performance Review - Business Groups Commercial Banking Investment Banking & Asset Management Insurance & Microfinance NOTE: The pre-consolidation numbers of each of the business groups have been considered in discussing the performance of each business. 21
Slide 22: Commercial Banking – Focused on optimising assets, driving long-term growth and profitability
Commercial Banking – Focused on optimising assets, driving long-term growth and profitability OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Nine months 2014: +14.0% +14.2% • Gross earnings growth of 14.2% y-o-y to N316.9bn (N277.6bn: 9M 2013) 316.9 103.7 118.0 was
Slide 23: Commercial Banking group – cont’d
Commercial Banking group – cont’d OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX • Improved traction in Mobile money business with focus on growing our share of the unbanked market - Growth in the number of Firstmonie registered users to c1.9mn (0.3mn 9M 2013; 0.5mn FY 2013) - Increase i
Slide 24: IBAM – Diversifying revenue streams and deepening customer relationships
IBAM – Diversifying revenue streams and deepeninf customer relationships OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Nine months 2014 : • Gross Earnings and PBT continue to grow Y-on-Y although there was a marginal decline in both parameters between the 2nd and
Slide 25: Insurance Group – Inorganic growth provides expanded market access
Insurance Group – Inorganic growth provides expanded market access OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross income – (Nbn) Nine months 2014: +27.0% • Insurance Group recorded a 67.7% growth in gross income to N4.6bn +67.7% in 9M 2014 (9M 2013: N2.7bn) showing the impact of th
Slide 26: Microfinance – Focus on quality risk assets while increasing fee-based income
Microfinance – Focus on quality risk assets while increasing fee-based income OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nmn) Nine months 2014: • FBN Microfinance (FBNM) recorded gross earnings and PBT of N854.2mn +0.2% 297.0 297.5 and N236.3mn respectively (9M 2013
Slide 27: Outlook
Outlook FBNHoldings 27
Slide 28: Outlook remains cautiously optimistic; Group operates in attractive markets and segments
Outlook remains cautiously optimistic; Group operates in attractive markets and segments OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX • Attractive macroeconomic trends in Nigeria with young population, rising middle class and high rural-urban migration Nigeria Remains the largest Wes
Slide 29: Outlook – 2014 financial targets
Outlook – 2014 financial targets OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FY 2013 Results 9M 2014 Results 2014 Targets Deposit growth 6.4% -0.6% ≤ 2% Net loan growth -1.2% 14.8% ~15%* Net interest margin 8.0% 7.4% 7 – 7.5%* Cost to income ratio 62.6% 65.0% 65 - 67%* Cost of risk 1.
Slide 30: Contact Details
Contact Details Head, Investor Relations Oluyemisi Lanre-Phillips Email: oluyemisi.lanre-phillips@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051146 +234 (1) 9051386 +234 (1) 9051086 30
Slide 31: Appendix
Appendix FBNHoldings 31
Slide 32: Diversified Group with international presence
Diversified Group with international presence OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FBN Holdings PLC First Bank of Nigeria FBN Microfinance Bank FBN Capital Limited FBN Insurance Limited Limited Limited First Pension Custodian Limited First Trustees Nigeria FBN Insurance Brokers
Slide 33: Improving contribution from shorter tenored loans
Improving contribution from shorter tenored loans OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Loans and advances by maturity Loans and advances by type (FirstBank - Nigeria only) (FirstBank - Nigeria only) 0 -30 days 1 - 3 months 3 - 6 months 6 - 12 months 1 - 3years 3-5years >5years
Slide 34: GDR Programme
GDR Programme FBN Holdings has a Sponsored Regulation S Global Depositary Receipt (RegS GDR) program Ticker symbol: 999112Z LI CUSIP: 31925X302 ISIN: US31925X3026 Ratio: 1 GDR : 50 Ordinary Shares Depositary bank: Deutsche Bank Trust Company Americas Depositary bank contact: Stanley Jone