Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — Q1 2018 Earnings Presentation
34 slides from Fidelity Bank's earnings presentation, 2018
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Unaudited Financial Results for the 3 months ended March 31, 2018 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. Q1 2018 Actual Vs. 2018FY Guidance 2 www.fidelitybank.ng
Slide 3: 1. Overview of Fidelity Bank
1. Overview of Fidelity Bank www.fidelitybank.ng 3
Slide 4: 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 N1,479.7 billion Nigeria (CBN). The Bank currently has over 400,000 diverse local and international shareholders. Total Equ
Slide 5: Retail & Digital Banking Evolution & Progress Report
Overview of Fidelity Bank Retail & Digital Banking Evolution & Progress Report Number of Customer Accounts (#’m) Savings deposits (N’bn) Retail Risk Assets (N’bn) 3.9 4.0 188.2 3.6 178.6 66.0 3.3 155.0 57.2 52.8 2.8 119.1 44.8 98.0 34.5 2014 2015 2016 2017 Q1 2018 2014 2015 2016 2017 Q1 2018 2014 20
Slide 6: 2. Operating Environment
2. Operating Environment www.fidelitybank.ng 6 6
Slide 7: The Operating Environment
The Operating Environment MPC maintains CRR at Credit to Private Sector 22.5% in 2017FY improving Improving Foreign Stock market on a Reserves recovery path Declining yield and Inflation Naira has been relatively stable Monetary Policy GDP on a path to Stability: benchmark economic recovery rate ret
Slide 8: 3. Financial Highlights
3. Financial Highlights 38 www.fidelitybank.ng 3
Slide 9: Performance Highlights
Performance Highlights Total Interest Income up by 6.2% to N38.5 billion in Q1 2018 (Q1 2017: N36.2 billion) Revenue Operating Expenses up by 5.2% to N15.1 billion in Q1 2018 (Q1 2017: N14.4 billion) and Cost-income Ratio inched up to 72.7% in Q1 2018 from 72.0% in Q1 2017 Efficiency Ratio P
Slide 10: Financial Highlights
Financial Highlights PBT increased by 2.7% YoY to N5.0 billion, driven by 6.2% (N2.2 billion) growth in total interest income and 12.6% (N0.4 billion) in fee income. Operating income increased by 4.2% YoY while operating expenses increased by 5.2% YoY driven by increased technology and regulator
Slide 11: Financial Highlights: Summary of Income Statement
Financial Highlights Summary of Income Statement: YoY Change N’million Q1 2017 Q1 2018 VAR % VAR Gross Earnings 40,842 43,680 2,838 6.9% Interest Income Loans 26,790 28,345 1,555 5.8% Interest Income Liquid Assets 9,440 10,121 681 7.2% Total Interest Income 36,230 38,466 2,236 6.2% Interest Expense
Slide 12: Financial Highlights: Statement of Financial Position
Financial Highlights Statement of Financial Position: YTD Change N’million 2017FY Q1 2018 VAR % VAR Total Assets 1,379,214 1,479,665 100,451 7.3% Earning Assets 977,076 1,027,853 50,777 5.2% Bank Placements 8,475 44,125 35,650 420.6% Treasury Bills 90,223 142,129 51,906 57.5% Bonds 109,641 102,872 (
Slide 13: 4. Financial Review – SCI
4. Financial Review – SCI 14 www.fidelitybank.ng
Slide 14: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) Q1 2017 Q1 2018 VAR % VAR Total Earnings: Q1 2017 Total Earnings: Q1 2018 Total Earnings 40,842 43,680 2,838 6.9% Maint. Fee, 1% Trade, 1% Trade, 1% Maint. Fee, 1% Interest Income Loans 26,790 28,345 1,555 5.8% E-banking, 5% Others, 3% E-banking, 4% Other
Slide 15: Net Interest Margin Analysis
Net Interest Margin Analysis NIM dropped to 6.7% in Q1 2018 from 7.3% in 2017FY NIM Trend (Q1 2017: 6.9%) due to a combination of increased funding cost and a decline in yields on earning assets. 7.4% 7.4% 7.3% 6.9% 6.7% Average funding cost inched up to 7.4% as we grew the deposit book in prepa
Slide 16: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) Q1 2017 Q1 2018 VAR % VAR Total Expenses: Q1 2017 Total Expenses: Q1 2018 Total Expenses 14,365 15,119 754 5.2% Others Exp., 35% Staff Cost, 37% Others Exp., 35% Staff Cost, 34% Staff Cost 5,256 5,072 -184 -3.5% Depreciation 910 769 -141 -15.5% NDIC/AMCON
Slide 17: Cost Dynamics – YoY Breakdown
Cost Dynamics – YoY Breakdown Breakdown of Operating Expenses: 2017 AVG. Vs. Q1 2017 Vs. Q1 2018 N’million 2017 AVG. Q1 2017 Q1 2018 VAR % VAR Branding & advert 2,043 1,928 1,350 (578) -30.0% Staff cost 6,134 5,256 5,072 (184) -3.5% Depreciation 1,093 910 769 (141) -15.5% Energy (Electricity & Diese
Slide 18: Cost Savings Analysis
Cost Savings Analysis Key Drivers in Q1 2018: YoY Actual Cost (Decrease) / Increase N'billion (0.58) (0.18) (0.14) (0.07) (0.04) (0.00) (0.00) (0.00) - 0.00 Branding & Staff Cost Depreciation Energy Repairs and Security Postage and Telephone Litigations and Stationery Advert (Electricity & maintenan
Slide 19: 4. Financial Review – SFP
4. Financial Review – SFP 14 www.fidelitybank.ng
Slide 20: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2017FY Q1 2018 VAR % VAR Funding Structure: 2017FY Funding Structure: Q1 2018 Demand Deposits 418,472 452,429 33,957 8.1% Equity, 16% Debt, 13% Debt, 14% Equity, 13% Savings Deposits 178,570 188,215 9,645 5.4% Tenor Deposits 178,234 218,713 40,479 22.7% Dem
Slide 21: Deposits Analysis
Deposits Analysis Total deposits increased across all deposit products Customer Deposits (including FX deposits) by 10.8% YTD to N859 billion from N'billion N775.3 billion in 2017FY 859.4 800.2 761.1 774.4 775.3 Further growth witnessed in retail deposits as savings deposits increase by 5.4% YTD
Slide 22: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Improved cross-selling of digital banking products and Savings Deposits Trend increased consumer disposable income is driving Savings N'billion deposits growth in the last 2 quarters 20.5% 21.2% 21.2% 23.0% 21.9% We expect double digit growth in Savings
Slide 23: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 24.6% 3.0% 9.6% 7.0% 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 82.8% 84.7% 35.9% 36.0% 78.7% 80.4% 33.7% 34.4% 72.3% 30.2% 30.0
Slide 24: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2017FY Vs. Q1 2018 N’million 2017FY Q1 2018 VAR % VAR Communication 37,874 43,562 5,688 15.0% Oil and Gas 204,695 198,068 -6,628 - 3.2% - Upstream 148,544 137,401 -11,142 - 7.5% - Downstream 27,362 30,598 3,236 11.8% - Services 28,7
Slide 25: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – Q1 2018 Construction, Agriculture, Others, 5.1% N’million Q2 2017 Q3 2017 Q4 2017 Q1 2018 3.6% 1.5% Communication, Communication 39,934 40,953 37,874 43,562 Oil & Gas: 5.5% Oil and Gas 199,839 212,551 204,695 198,068
Slide 26: Loan Book Analysis
Loan Book Analysis Net loans declined by 3.9% YTD to N738.7 billion on Net Loans and Advances to Customers account of increased IFRS 9 provisions which impacted N'billion net loans by over N28bn and loan pay-downs 730.4 753.8 768.7 738.7 720.2 FCY loans declined primarily due to a major pay-down
Slide 27: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2017FY Vs. Q1 2018 2017FY Q1 2018 VAR % VAR 2017FY Q1 2018 N'million N'million N'million % NPL Ratio NPL Ratio Communication 1,537 1,557 20 1.3% 4.1% 3.6% Oil and gas 13,624 12,891 -733 -5.4% 6.7% 6.5% - Oil & Gas Upstream - - 0 0.0% 0.0% 0.0
Slide 28: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – Q1 2018 Others, 11.3% Communication, Oil & Gas: N’million Q2 2017 Q3 2017 Q4 2017 Q1 2018 3.1% Upstream, 0.0% Construction, Communication 1,415 1,713 1,537 1,557 0.7% Power, 0.0% Oil and Gas 2,171 8,468 13,624 12,891 Oil & Gas:
Slide 29: NPL Analysis
NPL Analysis NPL declined to 6.3% from 6.4% in 2017FY, due to a 0.7% Gross Loans and Advances decline in NPLs coming largely from the Downstream and N'billion Transport Sectors 795.3 794.3 785.4 755.9 749.3 46.5 50.7 50.3 Coverage ratio is now 111.7% from 109.4% in 2017FY. 45.9 43.4 710.0 739.0
Slide 30: Capital Adequacy
Capital Adequacy Fidelity CAR was unchanged at 16.0%, which remains Capital Adequacy Ratio Computation – Basel II above the regulatory minimum requirement of 15.0%. N‘billion 2017FY Q1 2018 VAR The single obligor charge dropped to N14.6 billion due to Tier 1 Capital 165.3 165.3 0.0 absolute redu
Slide 31: Strategic Business Units Analysis
Strategic Business Units Analysis Business Description Location Based Analysis Handles the bank’s institutional clients with turnover in excess of ₦5.0bn. PBT Deposits Loans Corporate & Investment Key focus sectors include: Oil & gas upstream Oil & gas downstream 8.5% 12.7% Banking Power & i
Slide 32: 5. Q1 2018 Vs. 2018FY Guidance
5. Q1 2018 Vs. 2018FY Guidance 42 www.fidelitybank.ng 3
Slide 33: Q1 2018 Vs. 2018FY Guidance
Q1 2018 Vs. 2018FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index Q1 2018 Actual 2018FY Target Comment 1 Net Interest Margin 6.7% 6.5% - 7.0% On Track 2 Tax Rate 7.1% 10.0% - 12.0% On Track 3 Loan Growth (YTD) -3.9% 7.5% - 10.0% Behind Target 4 Deposit Growth (YTD) 10.8% 10.0% - 15.0% On T
Slide 34: 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