Slide 1: Investor Presentation
Investor Presentation Audited IFRS Financial Results for the 12 Months Ended December 2013
Slide 2: Outline
Outline 1 Fidelity overview (CEO – Nnamdi Okonkwo) 2 Financial highlights (CFO – Victor Abejegah) 3 Business overview (Head Strategy – Francis Ikenga) 4 Strategy and transformational initiatives (Head – SIBT & CEO) 1 12KLD0346_Client template1 15/04/2014 10:28:59
Slide 3: One of Nigeria's safest and strongest financial institutions
One of Nigeria’s safest and strongest financial institutions Capital Adequacy Ratio N'billion % CAR 180 44.0% 163.5 50% 161.5 150 40% 136.1 120 29% 30% 90 Fidelity may not be the 26% 20% 60 30 15% 10% 10.0% biggest, but we are one 10% 0 0% Dec 2010 Dec 2012 Dec 2013 Total Equity Fidelity CAR Regulat
Slide 4: Fidelity: a leading financial institution in Nigeria
Fidelity: a leading financial institution in Nigeria Fidelity Overview Key Financials Established in 1987 and received a universal banking Balance Sheet as at Dec 31, 2013 US$ ₦ licence by the Central Bank of Nigeria in 2001 Assets 6.9bn 1,081.2bn Loans and Advances to Customers 2.7bn 426.1bn So
Slide 5: Fidelity: a solid financial services opportunity
Fidelity: a solid financial services opportunity Fidelity is a solid investment opportunity in the Nigerian banking context for the following reasons: Continued strong growth in Nigerian economy is expected over the medium term as a Nigerian market result of robust economic fundamentals, despite
Slide 6: Platform for Growth and Quality
Platform for Growth and Quality Market leading position Experienced Strong franchise management team Consistent financial Sustained quality performance and and asset growth profitability Sound risk Rapidly growing management distribution network practice Transparent corporate governance 5 12KLD0346_
Slide 7: Outline
Outline 1 Fidelity overview 2 Financial highlights 3 Business overview 4 Strategy and transformational initiatives 6 12KLD0346_Client template1 15/04/2014 10:28:59
Slide 8: Fidelity Bank IFRS Financial Highlights
Fidelity Bank IFRS Financial Highlights (Naira in million) FYE - 2013 FYE - 2012 % Change Gross Earnings 126,918 119,418 6.3% Interest & Discount Income 86,257 78,996 9.2% Interest Expense 55,445 42,186 31.4% Impairment charge 7,630 4,610 65.5% Net Interest Income 30,812 36,810 -16.3% Non-interest I
Slide 9: Performance highlight
Performance highlight 7th largest bank in Nigeria by Equity One of the safest Nigerian banks with strong Capital Base Fidelity Brand Successful issue of $300 million Eurobond which was over subscribed Stable, experienced and well regarded management team Revenue Gross Earnings up 6.3% to N
Slide 10: Key Pressure Points in FYE 2013
Key Pressure Points in FYE 2013 a. AMCON Clawback of N4.4bn on previously sold loans b. One-off additional provision of N1.8bn in respect of Actuarial Valuation on gratuity and pension obligations. c. Increase in AMCON Levy from 0.3% to 0.5% of total assets which increased operating expenses. Year 2
Slide 11: Efficiency ratio
Efficiency ratio Growth in earnings was sustained at 6.5% y-on-y Gross Earnings amid CBN policy changes that stifled activity based N'billion income 126.92 119.42 Though interest income grew by 9.2%, high interest expense on deposits caused a drop in net interest income to N30.8 billion. 73.58
Slide 12: Cost dynamics
Cost dynamics Cost of deposits increased due to tightened monetary Operating Expenses & Staff Cost conditions, impact of increase in Cash Reserve Ratio and USD borrowing in 2013 N'billion % Share Focus on cost management has continued to rein in 60 54.8 50% 50.7 operating expenses. 37.4 40 47%
Slide 13: Diversified loan book
Diversified loan book Fidelity Bank credit expansion is largely dominated by Net Loans and Advances to Customers corporate loans accounting for over 71.6% of its total N'billion loan book and spread through Telecoms, General 426.1 Commerce, Oil & Gas Sector. 345.5 279.2 Focus remains on business
Slide 14: Foreign Currency Loan Book
Foreign Currency Loan Book Risk Assets Split by Currency - Dec 2013 Long-term Borrowing and Interest Cost - 2013 27.0% N'million Book Value Interest Exp. 73.0% Euro Bonds 47,844 2,783 Other Borrowing 22,484 574 Local Currency (NGN) Foreign Currency 70,328 3,357 Risk Assets Split by Currency - Dec 20
Slide 15: Improving loan quality
Improving loan quality NPL Coverage Ratio Improved loan monitoring system is resulting in low non- performing loans. N'billion % Coverage Ratio Improved NPL will result in reduced impairment charges 28 120% 23.1 96.8% 100.6% which will translate into an increase in earning. 21 90% 16.5 NPL rat
Slide 16: Strong funding base
Strong funding base Fidelity has sustained yr-on-yr positive growth in deposits, Funding Structure providing huge headroom for lending activities. ₦736.7bn ₦914.4bn ₦1,081.2bn Customer deposits accounts for 75% of total liabilities with debt at 6.5%. Low cost deposits was 67% of deposits. 0.0% 6
Slide 17: Sound liquidity position
Sound liquidity position Over 84% of its liquid assets is invested in Treasury Bills, Liquidity Ratio Government Bonds and the inter-bank market which 47.1% 45.7% provide good risk free returns on after-tax basis. At the current liquidity ratio of 45.7%, Fidelity possesses sufficient liquidity f
Slide 18: Capital adequacy
Capital adequacy Fidelity is well capitalized and has maintained a strong Capital Adequacy Ratio Capital Adequacy Ratio (CAR) above regulatory minimum N'billion % Ratio for a CBN International Authorized Bank 180 161.5 163.5 40% At current CAR, capital is adequate to support business 30% 120 ris
Slide 19: Outline
Outline 1 Fidelity overview 2 Financial highlights 3 Business overview 4 Strategy and transformational initiatives 18 12KLD0346_Client template1 15/04/2014 10:29:00
Slide 20: 26 years serving the Nigerian economy
26 years serving the Nigerian economy Strategic alliances with international financial Institutions, award winning innovative products and a vision to become a market leader is the way forward for Fidelity Obtained ISO Fidelity incorporated Accepted by Finalised merger 27001 as a Private Limited
Slide 21: Over 26 Years . . . and getting better
Over 26 Years . . . and getting better Some Recent Awards and Recognitions: Africa Oil & Gas Deal of the Year 2013 – Euromoney Project Finance, UK. Worldwide Award for Excellence in Transaction Processing– Deutsche Bank – 2012 & 2013 Telecoms Financing Bank of the Year 2012 – Nigeria Telecoms
Slide 22: Corporate banking and Treasury
Corporate banking and Treasury Corporate Banking Treasury Handles the bank’s institutional clients with turnover in Handles the bank’s investments, brokerage activities and the excess of ₦10.0bn. bank’s daily liquidity position Accounted for 39.5% of the bank’s average commercial assets and 31
Slide 23: Commercial and Consumer banking
Commercial and Consumer banking Handles clients not matching the corporate banking criteria Dec 2012 Dec 2013 Commercial Loans as % of Gross Loans 20.7% 20.% Presence in all 36 states in Nigeria Loans to Individuals as % of Gross Loans 7.3% 8.4% Customers with net sales of less than ₦10.0 bill
Slide 24: Risk management
Risk management Completed the implementation of an enterprise-wide risk Methods for asset-liability risk measurement management framework in 2011, with Deloitte of South BIS-standard method Africa as consultants Value at risk (Historical Simulation, Monte-Carlo) Board committees with executi
Slide 25: Outline
Outline 1 Fidelity overview 2 Financial highlights 3 Business overview 4 Strategy and transformational initiatives 1 12KLD0346_Client template1 15/04/2014 10:29:00
Slide 26: Key strategic intentions
Key strategic intentions Long-term strategy Mid-term strategy Continuously expand distribution capacities in Short-term strategy Extend the leverage on the value targeted markets to GOAL: chain of our corporate play to maintain a leading position TO BE extract maximum value from our NO.1 IN Stren
Slide 27: Fidelity: Positioning as SME Bank of choice
Fidelity: Positioning as SME Bank of choice SME growth strategy Key targets Adopting Transaction origination and monitoring Manufacturing Enterprises in High growth Sectors Strategy that leverages on our retail infrastructure with export potentials e.g. Shoes, leather, etc by having well trained R
Slide 28: Expanding the consumer banking franchise
Expanding the consumer banking franchise Growth strategy Key consumer banking indicators Focus on high utility low price - low cost N'billion % Share products and services for the increasing youth 120 8.4% 10% population and emerging middle class 7.3% 89.2 90 8% 67.1 Generate low priced liabilit
Slide 29: Leveraging on rapidly expanding retail infrastructure
Leveraging on rapidly expanding retail infrastructure Comments and focus Key indicators Good branch spread of 213 covering every State and key business town in Nigeria with 85% of total branch Branch Branch Economic Zone Count Economic Zone Count network planted in most economically viable regions
Slide 30: Fidelity Bank: Multi channel distribution network
Fidelity Bank: Multi channel distribution network Multi-channel distribution concept Key distribution channels Branches: all branches on-line realtime and fully operate on Finacle Core Branches Internet Banking: 24/7access to accounts via Internet; confirm/stop operations on cheques, etc Telepho
Slide 31: E-channel efficiency: Driver for Fidelity Retail Bank
E-channel efficiency: Driver for Fidelity Retail Bank Fidelity Bank e-Channel Market Share e-Channel Efficiency ATM Market Share ATM Uptime ATM Number Market Share 574 Switch Invalid Pin, System 600 10% Inoperative, 1.3% Malfunction, Insufficient 0.6% 0.1% 450 388 8% Funds, 3.4% Others, 3.6% Invalid
Slide 32: Retail strategy woven around value chain banking
Retail strategy woven around value chain banking 31 15/04/2014 10:29:00
Slide 33: Key transformational initiatives
Key transformational initiatives Platform for Action: Back to the Basics, Forward to the Future Centralizing most back office processes, thus reducing head count and average staff Process per branch in recognition of the challenging operating environment and uptake in Efficiency technology. Re-b
Slide 34: Key transformational initiatives
Key transformational initiatives Platform for Action: Back to the Basics, Forward to the Future We are deepening participation in select segments of the Large Corporate Loan market and other emerging sectors that meets our Risk Acceptance Criteria. Expanding and working the value chain of our La
Slide 35: Key transformational initiatives
Key transformational initiatives Platform for Action: Back to the Basics, Forward to the Future We have flattened our sales organizational structure to improve our speed to market and deepen customer interaction We have adopted a mantra “back to the basics, forward to the future”. This involves
Slide 36: Key Expectations
Key Expectations GROWTH EXPECTATIONS ON KEY INDICATORS S/N INDEX TARGET 2014 – 2016 RATIONALE 1 Net Interest Margin Targeting 6% Based on low cost deposits and earning assets growth expectations Targeting an effective tax Based on the impact of amended tax laws on Govt. Securities and Tax Rate 2 rat
Slide 37: Thank You
MP riveniry Thank You