Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — H1 2017 Earnings Presentation
39 slides from Fidelity Bank's earnings presentation, 2017
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Audited Financial Results for the 6 months ended June 30, 2017 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. H1 2017 Actual Vs 2017 FY Guidance 2 www.fidelitybank.ng
Slide 3: Overview of Fidelity Bank
1. Overview of Fidelity Bank 42 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 N1,308.7 billion Nigeria The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor
Slide 5: Overview of Fidelity Bank
Overview of Fidelity Bank Rapid deployment of electronic products to drive retail banking penetration Number of customer accounts (#’m) Mobile/Internet banking cust. (#’000) Number of Debit Cardholders (#000) 3.8 1,104 1,952 3.6 3.3 820 272 1,701 2.8 2.4 184 937 848 832 274 526 636 27 54 247 - 54 -
Slide 6: Operating Environment
2. Operating Environment www.fidelitybank.ng 6 6
Slide 7: The Operating Environment
The Operating Environment MPC retains CRR at 22.5% Credit to Private Sector at its July Meeting declining Improving Foreign Stock market on a Reserves recovery path Inflation declining Naira has been relatively stable Security Concerns: Monetary Policy Boko Haram and Stability: benchmark Regional ag
Slide 8: Financial Highlights
3. Financial Highlights 38 www.fidelitybank.ng 3
Slide 9: Performance Highlights
Performance Highlights Total Interest Income up by 27.8% to N72.9 billion in H1 2017 (H1 2016: N57.0 billion) Revenue Operating Expenses down by 1.8% to N30.9 billion in H1 2017 (H1 2016: N31.5 billion) and Cost-income Ratio down to 67.3% in H1 2017 from 74.2% in H1 2016. Efficiency Ratio PB
Slide 10: Financial Highlights
Financial Highlights Gross earnings increased by 22.1% YoY to N85.8 billion driven by a combination of increased yields on earning assets which led to a 27.8% YoY growth in interest income, and a 0.7% growth in net fee income to N11.2 billion. Net Interest Margin (NIM) increased to 7.4% in H1 20
Slide 11: Financial Highlights
Financial Highlights Total customer deposits decreased by 4.0% to N761.1 billion in June 2017 from N793.0 billion in December 2016, however low cost deposits continued to account for over 75% of total customer deposits. Savings deposits increased by 3.9% to N161.1 billion in June 2017 from N155.
Slide 12: Financial Highlights
Financial Highlights Summary of Income Statement: YoY Change N’million H1 2016 H1 2017 VAR % VAR Gross Earnings 70,259 85,821 15,562 22.1% Interest Income Loans 41,565 53,461 11,896 28.6% Interest Income Liquid Assets 15,441 19,392 3,951 25.6% Total Interest Income 57,006 72,853 15,847 27.8% Interes
Slide 13: Financial Highlights
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2017 Q2 2017 VAR % VAR Gross Earnings 40,842 44,979 4,137 10.1% Interest Income Loans 26,790 26,671 (119) -0.4% Interest Income Liquid Assets 9,440 9,952 512 5.4% Total Interest Income 36,230 36,623 393 1.1% Interest Expense C
Slide 14: Financial Highlights
Financial Highlights Statement of Financial Position: YTD Change N’million 2016 FY H1 2017 VAR % VAR Total Assets 1,298,141 1,308,702 10,561 0.8% Earning Assets 970,213 946,942 (23,271) -2.4% Bank Placements 13,011 5,615 (7,396) -56.8% Treasury Bills 126,823 106,128 (20,695) -16.3% Bonds 111,978 115
Slide 15: Financial Highlights
Financial Highlights Statement of Financial Position: QoQ Change N’million Q1 2017 Q2 2017 VAR % VAR Total Assets 1,310,854 1,308,702 (2,152) -0.2% Earning Assets 974,793 946,942 (27,851) -2.9% Bank Placements 10,000 5,615 (4,385) -43.9% Treasury Bills 114,338 106,128 (8,210) -7.2% Bonds 120,007 115
Slide 16: Financial Review – SCI
4. Financial Review – SCI 14 www.fidelitybank.ng
Slide 17: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) H1 2016 H1 2017 VAR % VAR Total Earnings: H1 2016 Total Earnings: H1 2017 Total Earnings 70,259 85,821 15,562 22.1% Maint. Fee, 1% Trade, 1% Maint. Fee, 1% Trade, 1% Interest Income Loans 41,565 53,461 11,896 28.6% E-banking, 11% Others, 4% E-banking, 4%
Slide 18: Net Interest Margin Analysis
Net Interest Margin Analysis NIM improved to 7.4% in H1 2017 from 6.4% in 2016FY as NIM Trend the increase in our average yield on earning assets outpaced the increase in average funding cost. 7.4% 7.0% 6.9% The yield on earning assets has consistently inched up 6.5% 6.4% since H1 2016, growing
Slide 19: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) H1 2016 H1 2017 VAR % VAR Total Expenses: H1 2016 Total Expenses: H1 2017 Total Expenses 31,458 30,901 -557 -1.8% Others Exp., Staff Cost, Others Exp., Staff Cost, Staff Cost 12,030 11,074 -956 -7.9% 33% 38% 36% 36% Depreciation 2,107 1,855 -252 -11.9% NDI
Slide 20: Cost Dynamics – YoY Breakdown
Cost Dynamics – YoY Breakdown Breakdown of Operating Expenses: H1 2016 Vs. H1 2017 N’million H1 2016 H1 2017 VAR % VAR Staff Cost 12,030 11,074 (956) -7.9% Technology Cost 1,527 1,267 (260) -17.0% Depreciation 2,107 1,855 (252) -11.9% Bank charges 417 217 (200) -48.0% Telephone expenses 216 50 (166)
Slide 21: Cost Dynamics – QoQ Breakdown
Cost Dynamics – QoQ Breakdown Breakdown of Operating Expenses: Q1 2017 Vs. Q2 2017 N’million Q1 2017 Q2 2017 VAR % VAR Bank charges 147 70 (77) -52.2% Repairs & Maintenance 691 626 (64) -9.3% Energy (Electricity & Diesel) 398 346 (52) -13.0% Legal expenses 71 22 (49) -69.2% Cash movement expenses 13
Slide 22: Cost Savings Analysis
Cost Savings Analysis Key Drivers in H1 2017: YoY Actual Cost Decrease / (Increase) N'billion 0.96 0.26 0.25 0.20 0.17 0.08 0.08 0.06 0.04 0.02 Staff Cost Technology Depreciation Bank charges Telephone Outsourced Security Legal expenses Training Postage and Cost expenses Cost expenses expenses couri
Slide 23: Financial Review – SFP
4. Financial Review – SFP 14 www.fidelitybank.ng
Slide 24: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2016 FY H1 2017 VAR % VAR Funding Structure: 2016 FY Funding Structure: H1 2017 Demand Deposits 453,461 413,619 (39,842) -8.8% Debt, 10% Equity, 15% Debt, 10% Equity, 16% Savings Deposits 155,019 161,101 6,082 3.9% Tenor Deposits 184,491 186,349 1,858 1.0%
Slide 25: Deposits Analysis
Deposits Analysis Total deposits declined by 4.0% YTD to N761.0 billion as Customer Deposits more customers favour investment in government N'billion securities due to very high returns compared to term 793.0 761.1 deposits. Nonetheless, savings deposits increased by 3.9% to N161.1 billion repre
Slide 26: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Retail loan book declined as we tightened underwriting Savings Deposits Trend standards due to the lower consumer disposable income N'billion Total savings deposits increased by 3.9% YTD to N161.1 163.7 161.1 billion, while it moderated downward QoQ by
Slide 27: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 20.7% 0.4% 8.1% 8.8% 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 36.3% 80.4% 34.4% 78.8% 78.0% 78.7% 33.2% 33.7% 73.3% 30.2% 30.0
Slide 28: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2016 FY Vs. H1 2017 N’million 2016 FY H1 2017 VAR % VAR Communication 43,566 39,934 -3,632 - 8.3% Oil and Gas 188,217 199,839 11,623 6.2% - Upstream 136,161 135,048 -1,113 - 0.8% - Downstream 18,591 26,221 7,630 41.0% - Services 33,
Slide 29: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – H1 2017 N’million 2016FY Q1 2017 Q2 2017 Agriculture, 1.4% Real Estate, Others, 2.2% 3.1% Communication 43,566 43,881 39,934 Construction, Communication, 3.5% 5.3% Oil and Gas 188,217 206,402 199,839 Oil and gas, - Up
Slide 30: Loan Book Analysis
Loan Book Analysis Net loans and advances increased by 0.3% YTD to N720.2 Net Loans and Advances to Customers billion as we remained cautious of increasing our N'billion exposure in selected sectors of the economy. 711.1 729.0 718.1 730.4 720.2 In absolute terms, growth was driven principally by
Slide 31: Restructured Loans / Foreign Currency
Restructured Loans / Foreign Currency Energy, Transport, Power and Manufacturing account for Foreign Currency Loan Book over 80% of our FCY loan book N’million % FX Loans % of Sector Oil & Gas Upstream 135,048 42.0% 100.0% Energy, Power and Construction account for over 80% of Transport 50,775 1
Slide 32: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2016 FY Vs. H1 2017 2016 FY H1 2017 VAR % VAR 2016 FY H1 2017 N'million N'million N'million % % NPL % NPL Communication 1,492 1,415 -77 -5.2% 3.4% 3.5% Oil and gas 2,184 2,171 -13 -0.6% 1.2% 1.1% - Oil & Gas Upstream 0 - 0 0.0% 0.0% 0.0% - Oi
Slide 33: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – H1 2017 Real Estate, 2.5% Others, 5.5% Communication, N’million 2016FY Q1 2017 Q2 2017 3.3% Agriculture, 1.8% Communication 1,492 1,450 1,415 Oil and gas, 5.0% Construction, 1.4% Oil and Gas 2,184 2,184 2,171 Power, 0.0% Govt.,
Slide 34: NPL Analysis
NPL Analysis NPL ratio improved to 5.8% from 6.6% in 2016 FY due to a Gross Loans and Advances 12.2% drop in absolute NPL figures and the growth in the N'billion total loan book. 736.7 757.8 743.1 755.9 749.3 The decline in absolute NPL volumes was across all sectors 25.1 34.1 49.4 45.9 43.4 exc
Slide 35: Capital Adequacy
Capital Adequacy Fidelity CAR improved to 18.4% in H1 2017 from 17.2% in Capital Adequacy Ratio Computation – Basel II 2016FY, which puts it well above the regulatory minimum N'million 2016 FY H1 2017 VAR requirement of 15.0%. Tier 1 Capital 166.1 173.7 7.6 The single obligor charge is now N13.0
Slide 36: Strategic Business Units Analysis
Strategic Business Units Analysis Business Description Location Based Analysis Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. PBT Deposits Loans Corporate & Investment Key focus sectors include: Oil & gas upstream Oil & gas downstream Banking Power & infrastru
Slide 37: H1 2017 Actual Vs. 2017 FY Guidance
5. H1 2017 Actual Vs. 2017 FY Guidance www.fidelitybank.ng 3
Slide 38: H1 2017 Actual Vs 2017FY Guidance
H1 2017 Actual Vs 2017FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index H1 2017 Actual 2017FY Target Comment 1 Net Interest Margin 7.4% 6.5% -7.0% On Track 2 Tax Rate 11.6% 15% to 20% On Track 3 Loan Growth (YTD) 0.3% 7.5% Behind Target 4 Deposit Growth (YTD) -4.0% 10.0% Behind Target 5 Co
Slide 39: 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