First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY 2022 & Q1 2023 Earnings Presentation
29 slides from First Holdco's earnings presentation, Jun 5, 2023
Slide 1: FY 2022 & Q1 2023 Results Presentation
FY 2022 & Q1 2023 Results Presentation 05 June 2023
Slide 2: Disclaimer
Disclaimer This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) audited financial statements for the year ended 31, December 2022 and unaudited financial statements for the period ended 31, March 2023. The Group’s Financial statements represent FBN Holdings Plc a
Slide 3: Key Highlights
FBNHoldings BY Defining Frontiers Key Highlights
Slide 4: A challenging operating environment
Key Highlights A challenging operating environment High inflationary environment tapered growth momentum Decline in revenue despite an increase in crude production 120 .0 2.5 100 .0 21.34 22.04 2.0 20.77 17.75 18.6 80.0 1.6 1.6 16.63 1.5 1.5 1.5 15.63 15.92 60.0 1.2 1.4 40.5 39.5 39.2 1.1 38.3 0.9 3
Slide 5: Reinforced foundations underpin growth trajectory
Key Highlights Reinforced foundations underpin growth trajectory • FY 22: Gross earnings of ₦805.1 billion (up 6.3% y-o-y); Q1 23: ₦259.5.1 billion (up 43.8% y-o-y) • FY 22: Profit before tax of ₦157.5 billion (down 5.4% y-o-y); Q1 23: (up 53.6% y-o-y) • Demonstrated sustainable income growth from c
Slide 6: Structural improvements deliver strengthened Group with significant upside potential
Key Highlights Structural improvements deliver strengthened Group with significant upside potential Improved governance and Distinctive competitive risk management advantages • Strong franchise and brand recognition • Improved governance focus • Systemic relevance • High-quality Board provides overs
Slide 7: 2023 Strategic Priorities
Key Highlights 2023 Strategic Priorities Enhance Revenue and Strengthen Value Optimise Operational Profitability Proposition Efficiency By activating next-gen capabilities to By leveraging the strength of our By eliminating operational duplications, jumpstart the next digital financial unique busine
Slide 8: Franchise strength, solid funding base, improving operational excellence underpin strong investment case
Key Highlights Franchise strength, solid funding base, improving operational excellence and disciplined capital management underpin strong investment case 2024 H1 2021 FY 2022 Q1 2023 Financial Targets Strong Low Cost of Healthy Internal Capital ROE Profitability Generation Funding 9.9% 14.5% 20.1%
Slide 9: Financial Review
FBNHoldings By Defining Frontiers Financial Review
Slide 10: FY 22: Delivered strong financial performance in a challenging environment
Financial Review FY 22: Delivered strong financial performance in a challenging operational and regulatory environment Gross Earnings ₦’billion Net-Interest Income ₦’billion Non-Interest Income ₦’billion Operating Income ₦’billion Impairment Charge ₦’billion +6.3% +59.2% -37.6% -0.4% -25.2% 757.3 80
Slide 11: Q1 2023: Sustained improvement in performance
Financial Review Q1 2023: Sustained improvement in performance Gross Earnings ₦’billion Net-Interest Income ₦’billion Non-Interest Income ₦’billion Operating Income ₦’billion Impairment Charge ₦’billion +43.8% +53.6% +11.8% +33.9% +93.1% 259.5 72.3 16.9 111.8 64.7 184.2 180.5 72.8 137.5 8.8 Q1 22 Q1
Slide 12: Strengthened Group with significant upside potential
Financial Review Strengthened Group with significant upside potential Post Tax ROaE (%) Net Interest Margin (%) Cost of Funds (%) NPL Ratio % NPL Coverage (%) 6.4 3.0 6.1 20.0 5.8 96.7 18.4 86.6 4.5 2.3 4.3 14.5 2.1 4.0 62.2 FY 21 FY 22 Q1 23 FY 21 FY 22 Q1 23 FY 21 FY 22 Q1 23 FY 21 FY 22 Q1 23 FY
Slide 13: Revenue growth driven by increase in interest income
Financial Review Revenue growth driven by increase in interest income; supported by margin optimisation Gross Earnings ₦’billion Gross Earnings Mix Interest Income Mix 21.9% 21.6% 27.2% 27.9% 20.6% 28.2% 35.9% 48.1% 805.1 259.5 757.3 73.4% 78.1% 78.4% 72.8% 68.6% 69.2% 180.5 60.6% 48.7% FY 21 FY 22
Slide 14: Robust non-interest income revenues on the back of increased transaction volume
Financial Review Robust non-interest income revenues on the back of increased transaction volume Non-interest Income Breakdown Net (₦’bn) Fees & Commission Breakdown Gross (₦’bn) • Fees & commission recorded a +27.2% increase y- o-y in Q1 23 (FY 22: +2.4%) -37.6% +2.4% • FY 22 non-interest income fe
Slide 15: E-business remains key to non-interest income
Financial Review E-business remains key to non-interest income and supports earnings from non- capital consuming sources Electronic Banking Revenue ₦’billion CAGR 17% +46.6% 56.8 55.1 17.9 48.7 48.0 23.7% 26.7% 32.1% 29.0% 23.5% 34.0 12.2 15.1% 24.2% 15.9% 32.2% 27.2% 14.5% 32.7% 25.0 30.6% 24.9% 14
Slide 16: Customer-centric innovations underpin growth
Financial Review Customer-centric innovations underpin growth Volume (million) Value ₦’billion CAGR 29% +65.0% CAGR 38% +39.3% 457 4,451 4,511 1,475 1,189 1,102 3,677 1,024 1,059 800 882 USSD 2,566 580 1,968 312 883 2017 2018 2019 2020 2021 2022 Q1 2022 Q1 2023 2017 2018 2019 2020 2021 2022 Q1 2022
Slide 17: Cost management remains a key priority
Financial Review Cost management remains a key priority; elevated Opex due to high inflation & regulatory requirements • FY 22 Opex +9.0% y-o-y and Q1 23 +20.6% y-o-y OPEX Drivers (₦’billion) on account of the high inflationary environment • CIR further improved to 60.4% in Q1 23 (FY 22: 2.7 61.7%;
Slide 18: Customer deposits continue to trend upward
Financial Review Customer deposits continue to trend upward; reinforcing our robust funding base • FY 22 customer deposits increased by 21.8% to Customer Deposits Mix (₦’billion) ₦7.1 trillion (FY 21: ₦5.9 trillion) • Q1 23 customer deposits rose by 6.6% to Q1 23 2,524 2,414 1,316 1,317 20 7,591 ₦7.
Slide 19: Revamped risk management strengthens the high-quality loan portfolio
Financial Review Revamped risk management strengthens the high-quality loan portfolio FirstBank Nigeria Loan Currency Mix FirstBank Nigeria Gross Loan per Sector (₦’trillion) Q1 23 20.0% 17.1% 10.0% 8.7% 8.3% 4.0%2.4% 6.1% 23.4% 3.6 50.4% 47.3% 54.2% 52.1% 54.3% 51.2% 50.4% 3.4 FY 22 19.5% 16.6% 9.2
Slide 20: Strengthened balance sheet supported by sustained asset quality improvements
Financial Review Strengthened balance sheet supported by sustained asset quality improvements FirstBank Nigeria NPL per Sector NPL Ratio 0.1% Q1 23 41.0% 17.2% 10.1% 4.4% 5.8% 4.5% 26.0% 3.3% 1.5% 22.8% 0.2% FY 22 44.4% 17.0% 9.5% 8.2% 6.0% 4.2% 9.9% 2.2% 1.4% 7.7% 6.1% 4.3% 4.0% Real Estate Agricul
Slide 21: Disciplined capital management supports organic capital accretion
Financial Review Disciplined capital management as strong earnings growth support organic capital accretion • Q1 23 CAR1 at 16.5% including Q1 23 profit (15.6% FirstBank Nigeria CAR (%) exc. profit) 17.4 16.8 16.5 • Capital remains adequate for the business Reg. threshold: • Organic capital generati
Slide 22: Thought leadership and responsible lending key tenets of our ESG approach
Financial Review A thought leadership and responsible lending key tenets of our ESG approach RESPONSIBLE LENDING & SUSTAINABILITY GOVERNANCE & THOUGHT CLIMATE INITIATIVES LEADERSHIP Driving sustainable finance ₦6.29 Trillion 64% and investments Screened for ESG risks transactions Independent Non- Ex
Slide 23: Strong focus on diversity, financial inclusion and communities
Financial Review Strong focus on diversity, financial inclusion and communities DIVERSITY & INCLUSION FINANCIAL INCLUSION & COMMUNITY INVESTMENT Empowering people 32% ₦5 Billion Women in Leadership Fund available to empower women • > 8,000 female employees impacted by First Women • ~ ₦100 million sp
Slide 24: Appendix
FBNHoldings By Defining Frontiers Appendix
Slide 25: Commercial Banking, Merchant Banking and Asset Management Group (FBNQuest)
Appendix Commercial Banking, Merchant Banking and Asset Management Group (FBNQuest) Commercial Banking Group Merchant Banking and Asset Management Group (FBNQuest) Key financial highlights & performance ratios Key financial highlights & performance ratios Income statement Statement of Financial Posi
Slide 26: Key regulatory and policy interventions
Appendix Key regulatory and policy interventions CBN introduces Naira Redesign Policy (₦200, ₦500, and ₦1000 notes) and revised cash withdrawal limits. The old CBN issued a circular on and new notes serve as legal tender CBN increased MPR by the enrolment of Other till December 2023 Financial Instit
Slide 27: Non-financial highlights
Appendix Non-financial highlights 8.1k 41.6 3,089 Million Automated Customer Teller Accounts* Machines 14,716,793 Employees Subscribers 6.1m 739 61% 39% First 12.06m 17,426 Mobile FirstBank Branches Subscribers ATM Cards P.O.S *Including wallets 27
Slide 28: Definitions
Appendix Definitions ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Cost of risk computed as annualised credit impairment charges divided by the average opening and closing gross loans balances ₋ Net-interest margin computed as annualised net interest income divi
Slide 29: Contact details
Appendix Contact details Head, Investor Relations Tolulope Oluwole Tolulope.O.Oluwole@fbnholdings.com +234 (1) 905 2720 Investor Relations Team investor.relations@fbnholdings.com : +234 (1) 905 1086; 1147 29
FBN Holdings — FY 2022 & Q1 2023 Earnings Presentation on 6ix