Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — 9M 2014 Earnings Presentation
33 slides from Fidelity Bank's earnings presentation, November 2014
Slide 1: Investor Presentation
Investor Presentation Unaudited IFRS Financial Results for the 9 Months Ended September 2014
Slide 2: Outline
Outline 1 Fidelity Overview (MD/CEO) 2 Nigerian Economy Overview (Head, Investor Relations) 3 Financial Highlights (CFO) 4 Financial Review (DH, SIBT) 5 Strategic Initiatives Update 1 12KLD0346_Client template1 06/11/2014 09:19:20
Slide 3: Overview of Fidelity Bank
Overview of Fidelity Bank Background Key Highlights A full service bank with International Authorisation established in 1987 and licensed by the Central Bank of Nigeria Total Assets 1,115 million The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and corpo
Slide 4: Overview of Fidelity Bank: Recent Awards and Recognitions
Overview of Fidelity Bank Recent Awards and Recognitions Deutsche Bank: Straight-Through-Processing (STP) Euromoney Project Finance: Africa Oil & Gas Deal of the Excellence Award Web Jurist Awards: Best Bank Website Content Year Business day Banking Award: Best Bank in Support of Great Place to Work
Slide 5: Outline
Outline 1 Fidelity Overview 2 Nigerian Economy Overview 3 Financial Highlights 4 Financial Review 5 Strategic Initiatives Update 4 12KLD0346_Client template1 06/11/2014 09:19:20
Slide 6: Economy: Strong fundamentals, solid growth
Economy: Strong fundamentals, solid growth Headline Inflation Headline Inflation (2014) Headline inflation dipped to 8.3% yr-on-yr in Sep 2014, after recording 11 months high in Aug 2014 at 8.5%. 8.5% 8.2% 8.3% 8.3% Moderation in food prices accounted for the drop which reflected on the 30bps 8.
Slide 7: Outline
Outline 1 Fidelity Overview 2 Nigerian Economy Overview 3 Financial Highlights 4 Financial Review 5 Strategic Initiatives Update 6 12KLD0346_Client template1 06/11/2014 09:19:20
Slide 8: Performance Highlight
Performance Highlight Tier 2 bank with a strategic focus on the Retail, SME and Corporate Segments 6th largest bank in Nigeria by Equity, 17th largest in Africa and 622nd in World Fidelity Brand Successful issue of $300 million Eurobond, which was over subscribed Stable, experienced and well
Slide 9: Financial Highlights
Financial Highlights Summary of Income Statement - 9M 2014 Vs 9M 2013 9M 2014 9M 2013 VAR % VAR Gross Earnings 96,023 92,784 3,239 3.5% Interest Income Loans 51,614 42,819 8,795 20.5% Interest Income Liquid Assets 25,204 23,466 1,738 7.4% Total Interest Income 76,818 66,284 10,534 15.9% Interest Exp
Slide 10: Financial Highlights
Financial Highlights Summary of Income Statement– Quarterly Trend (Naira in million) Q3-2014 Q2-2014 Q1-2014 VAR % VAR Gross Earnings 32,765 32,303 30,955 462 1.4% Interest Income Loans 18,127 16,763 16,724 1,364 8.1% Interest Income Liquid Assets 7,163 8,497 9,544 (1,334) -15.7% Total Interest Inco
Slide 11: Financial Highlights
Financial Highlights Statement of Financial Position: Sep 2014 Vs Sep 2013 (Naira in million) Sep 2014 Sep 2013 VAR % VAR Total Assets 1,115,922 1,030,433 85,488 8.3% Earning Assets 774,260 706,064 68,196 9.7% Bank Placements 26,900 3,000 23,900 796.7% Treasury Bills 189,770 190,952 -1,182 -0.6% Bon
Slide 12: Financial Highlights
Financial Highlights Statement of Financial Position: Quarterly Trend (Naira in million) Sep 2014 Jun 2014 Mar 2014 VAR % VAR Total Assets 1,115,922 1,058,235 1,042,962 57,686 5.5% Earning Assets 774,260 718,383 698,829 55,877 7.8% Bank Placements 26,900 23,450 9,500 3,450 14.7% Treasury Bills 189,7
Slide 13: Financial Highlights
Financial Highlights Operating income was flat during the quarter due to the declining yields on government securities, however PBT declined by 2.0% due to the increased cost base and loan provisions. Yields on liquid assets moderated downwards in Q3 2014 compared to Q2–2014, resulting in N1.3 b
Slide 14: Outline
Outline 1 Fidelity Overview 2 Nigerian Economy Overview 3 Financial Highlights 4 Financial Review 5 Strategic Initiatives Update 13 12KLD0346_Client template1 06/11/2014 09:19:20
Slide 15: Gross Earnings Analysis
Gross Earnings Analysis Key Highlight (N’million) 9M 2014 9M 2013 2013 FYE Gross Earnings :9M 2014 Gross Earnings : 9M 2013 Gross Earnings 96,023 92,784 126,918 E-banking, Other Income, E-banking, Other Income, Interest Income Loans 51,614 42,819 51,017 COT, 3.5% 2.0% 4.8% 1.4% 8.5% Interest Income
Slide 16: Efficiency Ratio
Efficiency Ratio Net interest income grew by 42.6%, driven largely by Net Interest Income 18.9% growth in loans which resulted in 20.5% growth in N'billion interest income on loans. 36.7 Operating income increased by 18.7%, though cost 25.7 pressures and net losses on financial instruments cause
Slide 17: Expense Analysis
Expense Analysis Key Highlight (N’million) 9M 2014 9M 2013 2013 FYE Operating Exp: 9M 2014 Operating Exp: 9M 2013 Total Expenses 40,577 35,613 54,815 Staff 18,380 15,776 25,629 Depreciation 2,853 2,741 3,211 Others Exp., 29% Others Exp., 32% Regulatory (NDIC/AMCON) 6,578 4,849 7,904 Staff Cost, 45%
Slide 18: Cost Dynamics
Cost Dynamics Staff cost remains the largest contributor to operating Operating Expenses & Staff Cost expense. With continued optimization of processes, N'billion % Share the impact of staffing new branches would be 44 40.6 100% 35.6 moderate in Q4 - 2014. 33 75% Cost – income ratio stood high a
Slide 19: Funding Structure
Funding Structure Key Highlights (N’m) Sep 2014 Sep 2013 Dec 2013 Funding Structure: Sep 2014 Funding Structure: Sep 2013 Demand Deposits 417,975 369,802 447,968 Equity, 16% Equity, 16% Savings Deposits 86,314 73,651 89,202 Eurobond, 5% Eurobond, 5% Time Deposits 307,569 315,164 269,150 Demand, 39%
Slide 20: Strong Funding Base
Strong Funding Base Deposit has been appropriately matched against Customer Deposits short-term obligations as we continue to optimize our N'billion balance sheet. 811.9 Deposit mix improved in Sep 2014 as the ratio of cheap 758.6 deposits to total customer deposits increased to 62.1% from 57.6%
Slide 21: Sound Liquidity Position
Sound Liquidity Position Liquidity ratio has consistently stood well above Liquidity Ratio regulatory minimum of 30.0% Liquidity Ratio Currently, 89.2% of qualified liquid assets is invested in 38.9% treasury bills, government and corporate bonds and 34.7% the inter-bank securities which provide
Slide 22: Portfolio Analysis
Portfolio Analysis Breakdown of Loans & Advances: Sep 2014 Vs Sep 2013 (Naira in million) Sep 2014 Sep 2013 VAR % VAR Communication 86,204 89,608 (3,404) -3.8% Oil and gas 122,410 61,265 61,146 99.8% Power 46,652 44,742 1,910 4.3% Manufacturing 31,408 28,491 2,917 10.2% General Commerce 44,110 49,31
Slide 23: Portfolio Analysis
Portfolio Analysis Breakdown of Loans & Advances Portfolio Analysis – Sep 2014 Other Sectors, 14.3% Communication, (Naira in million) Sep 2014 Jun 2014 Mar 2014 Real Estate, 1.5% 16.9% Communication 86,204 87,229 87,973 Agriculture, 2.0% Oil and gas 122,410 72,451 68,272 Construction, 3.6% Oil and g
Slide 24: Portfolio Analysis
Portfolio Analysis Breakdown of Non-performing Loans: Sep 2014 Vs Sep 2013 (Naira in million) Sep 2014 Sep 2013 N’million % Contr. % NPL N’million % Contr. % NPL Communication 4,458 19.8% 5.2% 10 0.1% 0.0% Oil and gas 2,167 9.6% 1.8% 2,795 19.2% 4.6% Power 0 0.0% 0.0% 0 0.0% 0.0% Manufacturing 6,903
Slide 25: Diversified Loan Book
Diversified Loan Book Large concentration of loans in the corporate market Net Loans and Advances to Customers segment, though SME tailored financing witnessed N'billion 106% growth between Jun 2014 and Sep 2014. 489.5 We will continue to grow our loan book responsibly by achieving a diversified
Slide 26: Improving Loan Quality
Improving Loan Quality NPL ratio has been kept below the CBN minimum Gross Loans & Advances requirement of 5.0% since Dec 2012, on account of N'billion improved loan quality and monitoring system. 510.3 Increased NPL was caused by newly classified loans in the Manufacturing, Telecoms and General
Slide 27: Capital Adequacy
Capital Adequacy Capital Adequacy Ratio Fidelity is well capitalized and has maintained a strong N'billion % Ratio Capital Adequacy Ratio (CAR) above regulatory 169.0 180 162.2 40% minimum. 24% 30% 120 22% Basel I and Basel II CAR stood at 26.5% and 22.3% 20% respectively as at Sep 30, 2014. 60
Slide 28: Business Segment Analysis
Business Segment Analysis Corporate & Investment Bank accounts for 74.6% of the Total Revenue loans and advances due to the significant loan growth in Q3, 2014 which explains its 32.7% contribution to total revenue. Corporate & Invt. Bank, Lagos & SW Bank, 32.7% 29.6% Telecoms, construction, oil
Slide 29: Outline
Outline 1 Fidelity Overview 2 Nigerian Economy Overview 3 Financial Highlights 4 Financial Review 5 Strategic Initiatives Update 27 12KLD0346_Client template1
Slide 30: Exposure to Upstream Oil & Gas Sector
Exposure to Upstream Oil & Gas Sector Recent volatility in crude oil prices has elicited reactions both in the local and international economy. This slide sets to provide insights into Fidelity Bank’s exposure to the oil and gas upstream sector. At N163.6/$USD, the portfolio size amounts to Sub Se
Slide 31: Update on Strategic Initiatives
Update on Strategic Initiatives Retail banking business is beginning to show some financial traction; initial signs on the deposit and asset book are encouraging. We launched our Instant Salary Advance Scheme (ISAS), a product designed to meet the urgent financial needs of customers in a given m
Slide 32: Revised Growth Expectations
Revised Growth Expectations GROWTH EXPECTATIONS ON KEY INDICATORS S/N INDEX 2014 TARGET RATIONALE Based on low cost deposits and earning assets growth 1 Net Interest Margin 6% expectations Based on the impact of amended tax rebates on Govt. 2 Tax Rate 10% to 15% Securities and tax credits on syndica
Slide 33: Thank You
MP rrvenrry Thank You