Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Unaudited Financial Results for the 9 months ended November 03, 2016 www.fidelitybank.ng
Slide 2: Outline
Outline 1. The Operating Environment 2. Overview of Fidelity Bank 3. Financial Highlights 4. Financial Review 5. Update on Board Retirement/Appointments 6. 2016FY Guidance 2 www.fidelitybank.ng
Slide 3: The Operating Environment / Overview of Fidelity Bank
1. The Operating Environment 2. Overview of Fidelity Bank www.fidelitybank.ng 3
Slide 4: The Operating Environment
The Operating Environment General Business Environment Banking Industry Specifics Nigeria is officially in recession; GDP figures dropped The Monetary Policy Committee (MPC) kept all policy from -0.36% in Q1 to -2.06% in Q2, 2016. rates unchanged in its Sep 2016 meeting. Headline inflation rat
Slide 5: 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 N1,396.1 billion Nigeria The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor
Slide 6: Financial Highlights
3. Financial Highlights www.fidelitybank.ng 6 6
Slide 7: Performance Highlights
Performance Highlights Total Interest Income up by 3.0% to N91.4 billion in 9M 2016 (9M 2015: N88.8 billion) Revenue Net Fee Income down by 3.0% to N16.8 billion in 9M 2016 (9M 2015: N17.3 billion) and Net Interest Margin improved to 7.0% in 9M 2016 from 6.9% in 2015 FY. Efficiency Ratio PBT
Slide 8: Financial Highlights
Financial Highlights PBT declined by 28.7% YoY largely due to an increase in impairment charge by N4.0bn and a decline in dividend income by N1.3bn. However, PBT increased QoQ driven by strong growth in net interest income riding on a higher NIM. Operating income increased by 8.6% YoY while oper
Slide 9: Financial Highlights
Financial Highlights NPL ratio increased to 4.5% largely due to the macro-economic weakness which has negatively impacted on our asset quality metrics. We are still focused on keeping our NPL ratio below 5.0% in this very challenging operating environment. Our other regulatory ratios (Liquidity
Slide 10: Summary of Income Statement: 9M 2015 vs 9M 2016
Financial Highlights Summary of Income Statement: 9M 2015 Vs 9M 2016 N’million 9M 2015 9M 2016 VAR % VAR Gross Earnings 107,140 110,346 3,206 3.0% Interest Income Loans 62,919 68,002 5,083 8.1% Interest Income Liquid Assets 25,853 23,426 (2,428) -9.4% Total Interest Income 88,772 91,428 2,656 3.0% I
Slide 11: Summary of Income Statement: QoQ Change
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2016 Q2 2016 Q3 2016 VAR % VAR Gross Earnings 34,356 36,059 39,931 3,872 10.7% Interest Income Loans 20,798 20,923 26,281 5,357 25.6% Interest Income Liquid Assets 8,406 7,036 7,984 948 13.5% Total Interest Income 29,204 27,95
Slide 12: Statement of Financial Position: 2015 FY vs 9M 2016
Financial Highlights Statement of Financial Position: 2015 FY Vs 9M 2016 N’million 2015 FY 9M 2016 VAR % VAR Total Assets 1,159,184 1,396,055 236,871 20.4% Earning Assets 789,058 969,396 180,338 22.9% Bank Placements 11,500 2,000 (9,500) -82.6% Treasury Bills 173,719 129,798 (43,921) -25.3% Bonds 56
Slide 13: Statement of Financial Position: QoQ Change
Financial Highlights Statement of Financial Position: QoQ Change N’million Q1 2016 Q2 2016 Q3 2016 VAR % VAR Total Assets 1,281,240 1,397,867 1,396,055 (1,811) -0.1% Earning Assets 887,688 971,521 969,396 (2,125) -0.2% Bank Placements - - 2,000 2,000 100.0% Treasury Bills 178,693 143,771 129,798 (13
Slide 14: Financial Review – SCI
4. Financial Review – SCI 14 www.fidelitybank.ng
Slide 15: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) 9M 2015 9M 2016 VAR % VAR Total Earnings: 9M 2015 Total Earnings: 9M 2016 Total Earnings 107,140 110,346 3,206 3.0% Maint. Fee/COT, 2% Maint. Fee/COT, 1% Interest Income Loans 62,919 68,002 5,083 8.1% E-banking, 4% Others, 6% E-banking, 8% Others, 4% Int.
Slide 16: Change in Key Revenue Lines (YoY / QoQ)
Change in Key Revenue Lines ( YoY / QoQ) Key Revenue Lines in 9M 2016: YoY Actual Increase / (Decrease) N'billion 5.08 4.83 0.17 0.13 (0.41) (1.31) (2.38) (2.43) (1.75) Int. Income Loans E-Banking Trade Income Remittance Maintenance Dividend Income FX Income Int. Inc. Liquid Other Income Fee/COT Ass
Slide 17: Net Interest Margin Analysis
Net Interest Margin Analysis NIM increased marginally to 7.0% from 6.9% in 2015FY as NIM Trend the decline in average funding cost outpaced the reduction in average yield on earning assets. 7.3% 7.0% Average funding costs dropped by 1.22% YTD, on account 6.9% 6.5% of improved deposit mix; low co
Slide 18: E-Banking Income Analysis
E-Banking Income Analysis E-banking income declined 69.0% QoQ (while it went up Quarterly Revenue Trend by 116.7% YoY) principally due to a significant drop in our N'billion international card transaction fees, however other ebanking income lines grew QoQ. 4.85 The drop in revenue was largely ca
Slide 19: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) 9M 2015 9M 2016 VAR % VAR Total Expenses: 9M 2015 Total Expenses: 9M 2016 Total Expenses 44,757 48,741 3,983 8.9% Staff Cost 19,257 18,407 -850 -4.4% Staff Cost, 43% Staff Cost, 38% Others Exp., 30% Others Exp., 34% Depreciation 2,947 3,241 294 10.0% Regul
Slide 20: Cost Dynamics
Cost Dynamics Total operating expenses increased by 8.9% YoY (8.7% Operating Expenses & Staff Cost QoQ, with advert cost, technology expenses, electricity & N'billion % Share diesel, deprecation etc. being the key cost drivers. 53 48.7 50% 44.8 Cost to income ratio remained high at 73.3% YoY fro
Slide 21: Cost Dynamics
Cost Dynamics Breakdown of Operating Expenses: 9M 2015 Vs 9M 2016 N’million 9M 2015 9M 2016 VAR % VAR Branding & Advert 3,230 6,776 3,546 109.8% Computer Expenses 1,161 2,420 1,259 108.4% Corporate Finance Expenses 237 539 302 127.5% Depreciation 2,947 3,241 294 10.0% Repairs & Maintenance 1,686 1,8
Slide 22: Cost Optimization Impact in Q3 2016
Cost Optimization Impact in Q3 2016 Key Cost Drivers in 9M 2016: YoY Actual Cost Increase N'billion 3.55 1.26 0.30 0.29 0.19 0.11 0.11 0.11 0.07 0.07 Branding & Computer Corporate fin. Depreciation Repairs & Regulatory Cost Electricity & Telephone Consultancy Travelling & Advert expenses expenses ma
Slide 23: Financial Review – SFP
4. Financial Review – SFP www.fidelitybank.ng 23
Slide 24: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2015FY 9M 2016 VAR % VAR Funding Structure: 2015 FY Funding Structure: 9M 2016 Demand Deposits 328,549 480,276 151,727 46.2% Equity, 16% Savings Deposits 119,140 143,385 24,245 20.4% Debt, 8% Debt, 9% Equity, 14% Tenor Deposits 321,947 171,931 (150,016) -46
Slide 25: Deposits Analysis
Deposits Analysis Total deposits increased by 3.4% YTD to N795.6 billion due Customer Deposits to 46.2% and 20.4% increase in demand and savings N'billion deposits respectively. 829.9 795.6 769.6 784.5 25.6 On the basis of QoQ, deposits dropped by 4.1% on account 54.39 70.55 62.98 53.6 96.08 of
Slide 26: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Savings deposits grew by 20.4% YTD which contributed to Savings Deposits Trend the decline in our funding cost. N'billion 138.1 143.4 Growth was as a result of the disciplined execution of our 135.1 119.1 retail baking strategy and improved cross-sellin
Slide 27: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 22.7% 0.1% 9.3% 7.8% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio % Total Loans to Customer Deposits 37.5% 78.8% 36.0% 36.3% 73.3% 34.4% 66.5% 62.8% 30.0% 30.0% 30.0
Slide 28: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2015FY Vs 9M 2016 N’million 2015 FY 9M 2016 VAR % VAR Communication 48,298 48,729 431 0.9% Oil and Gas 147,407 210,159 62,752 42.6% - Upstream 97,568 145,373 47,805 49.0% - Downstream 23,430 32,791 9,361 40.0% - Services 26,409 31,9
Slide 29: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – Q3 2016 N’million Q4 2015 Q1 2016 Q2 2016 Q3 2016 Agriculture, Real Estate, Others, 1.7% 1.4% 3.2% Communication 48,298 50,388 52,501 48,729 Communication, Construction, 6.4% Oil and Gas 147,407 147,077 189,896 210,15
Slide 30: Loan Portfolio Analysis
Loan Portfolio Analysis QoQ Change in Loans & Advances to Customers N’million Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Oil & Gas Upstream (2,401) (7,143) (2,737) 38,246 12,296 Oil & Gas Downstream (8,685) 261 698 161 8,502 Transport (1,088) 1,530 403 14,424 7,997 Real Estate 1,309 (112) (25) 4,027 2,
Slide 31: Loan Book Analysis
Loan Book Analysis Net loans and advances increased by 26.1% YTD (2.5% Net Loans and Advances to Customers QoQ) to N729.0 billion with the devaluation of naira N'billion accounting for about 20.4% (N118.2bn) of the loan growth. 711.1 729.0 578.2 590.1 89.9 118.2 Excluding devaluation, real loan
Slide 32: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2015 FY Vs 9M 2016 2015 FY 9M 2016 N’million % Contr. % NPL N’million % Contr. % NPL Communication 1,919 7.3% 4.0% 1,928 5.6% 4.0% Oil and gas 2,319 8.9% 1.6% 4,537 13.3% 2.2% - Upstream 0 0.0% 0.0% - 0.0% 0.0% - Downstream 262 1.0% 1.1% 1,36
Slide 33: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – Q3 2016 N’million Q4 2015 Q1 2016 Q2 2016 Q3 2016 Real Estate, 5.9% Others, 5.4% Communication, Agriculture, 2.3% 5.6% Communication 1,919 1,944 1,001 1,928 Oil and gas, Oil and Gas 2,319 2,350 3,528 4,537 Construction, 4.9% 13.
Slide 34: NPL Analysis
NPL Analysis NPL increased to 4.5% from 4.4% in 2015FY as we take a Gross Loans and Advances conservative approach to risk assets classification due to N'billion the relatively unstable macro environment. 757.8 736.7 Coverage ratio increased to 84.2%% from 79.5% in 2015FY 599.0 611.6 25.1 34.1 d
Slide 35: Capital Adequacy
Capital Adequacy Capital Adequacy Ratio Computation – Basel II Fidelity CAR declined to 16.8% from 18.7% in 2015FY, primarily due to an 21.7% increase in credit risk driven by N‘ billion 2015 FY 9M 2016 VAR 9M 2016** the currency devaluation. Tier 1 Capital 143.7 143.7 - 166.7 We already have re
Slide 36: 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: 13.3% Oil & gas upstream Oil & gas downstream 45.0% Banking Power & infrastructure Telecomm
Slide 37: Business Segment Analysis
Business Segment Analysis Corporate Banking Lagos & SW North South Revenue 45.0% 21.3% 14.7% 19.0% Corporate Banking Lagos & SW North South Deposits 13.3% 35.8% 24.1% 26.8% Corporate Banking Lagos & SW North South Loans 62.3% 8.3% 14.2% 15.3% 37 www.fidelitybank.ng
Slide 38: Update on Board Retirement/Appointments
5. Update on Board Retirement/Appointments 38 www.fidelitybank.ng 3
Slide 39: Update On Board Retirement/Appointments
Update On Board Retirement/Appointments Chief Christopher Ezeh (MFR) has retired as the Chairman of the Board of Directors, having served as the Chairman of Fidelity Bank Plc for over 11 years and attained the retirement age for non-executive Directors in line with the Bank’s policy. Profile Of The
Slide 40: Update On Board Retirement/Appointments
Update On Board Retirement/Appointments Mr. Ernest Ebi was appointed Non-executive Director and Chairman Designate of Fidelity Bank Plc effective November 01, 2016 subject to regulatory approval. Profile Of The Chairman Designate MR. ERNEST EBI was a Deputy Governor of Central Bank of Nigeria for 10
Slide 41: Update On Board Retirement/Appointments
Update On Board Retirement/Appointments The Board of Fidelity Bank Plc also approved the appointment of Mr. Kings C. Akuma and Mr. Charles Chidebe Umolu as Non- Executive Directors of the Bank effective November 01, 2016 subject to regulatory approval. MR. KINGS AKUMA is the Managing Director of Ham
Slide 42: 2016FY Guidance
6. 2016FY Guidance 42 www.fidelitybank.ng 3
Slide 43: 2016FY Guidance
2016FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 9M 2016 Actual 2016FY Target Comment 1 Net Interest Margin 7.0% 6.75% -7.0% On Track 2 Tax Rate 11.0% 15% to 20% On Track 3 Loan Growth (YTD) 26.1% 5.0% to 7.5% On Track 4 Deposit Growth (YTD) 3.4% 5.0% to 7.5% Behind Target 5 Cost - In
Slide 44: 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