First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — H1 2017 Earnings Presentation
29 slides from First Holdco's earnings presentation, 2017
Slide 1: Investor & Analyst Presentation
Investor & Analyst Presentation Half year ended 30 June 2017 1
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘the company’ or the ‘Group’) unaudited results for the six months ended 30 June, 2017. The Group’s Financial statements have been prepared using the accounts of the subsidiaries and businesses within FBNHoldings. The company has
Slide 3: Outline
Outline H1 2017 Key Highlights Pg 4-10 Financial Review Pg 11 - 16 Risk Management Pg 17 - 20 Appendix Pg 22- 29 Pg 24- 31 Pg 32 - 36 3
Slide 4: H1 2017 Key Highlights
FBNHoldings H1 2017 Key Highlights
Slide 5: Gradual economic recovery in the first half of 2017
Gradual economic recovery in the first half of 2017 with increased foreign currency interventions H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Slow economic recovery with declining inflation Year to date improvement in crude oil production capacity and accretion to foreign reserv
Slide 6: Regulatory interventions focused on improving FX liquidity
Regulatory interventions with focus on improving FX liquidity to stabilise the macro economic environment …..monetary policy stance maintained through the first half of 2017 H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX KEY REGULATORY DEVELOPMENTS January – March 2017 April – June
Slide 7: Sustained revenue generating capacity from core business operations
Sustained revenue generating capacity from core business operations with focus on stronger asset quality H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX INCOME STATEMENT KEY HIGHLIGHTS Gross Net interest Operating • Earnings generating capacity Profit before remains strong with 7.8%
Slide 8: Robust liquidity, improving asset quality and operational efficiency
Robust liquidity, improving asset quality and operational efficiency with capital protection significantly enhanced over the prior period H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX KEY RATIOS KEY HIGHLIGHTS • Cost optimisation initiatives continue to gain traction but NPL ratio
Slide 9: Key initiatives demonstrating commitment to execution
Key initiatives demonstrating commitment to execution with a strong focus on rebuilding the Group for enhanced shareholder value H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX • Continuous reinforcement of the risk • Capital adequacy ratio above our 1 governance and architecture ac
Slide 10: Our 2017 - 2019 Strategic outlook
Our 2017 - 2019 Strategic outlook H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Focus Through Goals People • Single digit NPL • Cost of Risk less than 2% • Cost to Income ≤ 50% • Enhanced revenue Process Rebuilding the generation Group for • Return on Equity >20% Enhanced Technolo
Slide 11: Financial Review
Financial Review FBNHoldings 11
Slide 12: H1 2017 results snapshot
H1 2017 results snapshot H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Income statement Nbn H1 16 H1 17 y-o-y Key ratios1 FY 16 H1 16 H1 17 Gross earnings 267.9 288.8 7.8 Net interest margin1 8.8% 7.2% 8.5% Net interest income 126.1 164.1 30.2 Cost to income1, 47.0% 47.4% 54.4% No
Slide 13: Improving cost to income ratio in line with our commitment
Improving cost to income ratio in line with our commitment H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Operating expenses (Nbn) Cost to Income - H1 2017: 54.4% [H1 2016: 47.4%] Adjusting for Foreign exchange revaluation gains, cost to income : 54.7% (June 2016:59.7%) N53.4 N57.5
Slide 14: Balance sheet optimisation resulting in improved blended asset yield
Balance sheet optimisation resulting in improved blended asset yield H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Net Interest Margin Drivers 14.1% 13.9% 13.1% 12.8% 12.3% 8.8% 12.1% 7.5% 8.2% 8.5% 7.2% 10.2% 11.7% 11.7% 9.7% 3.4% 3.5% 2.4% 2.7% 2.8% H1 16 9M16 FY 16 Q1 17 H1 17
Slide 15: Strong retail franchise provides stable and well diversified funding base
Strong retail franchise provides stable and well diversified funding base H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Funding by type Nbn Deposits by SBU Nbn 1 FBNHoldings FirstBank (Nigeria) Deposits from Banks Deposits from customers Financial investment liabilities Retail ban
Slide 16: Strong liquidity supports efficient balance sheet management
Strong liquidity supports efficient balance sheet management H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Balance sheet efficiency Capital ratios FirstBank (Nigeria) Leverage (times)1 Gross loans to deposits Total RWA (N'bn) CAR - FBN Liquidity (FirstBank - Nigeria) 75.2% 77.1% 7
Slide 17: Risk Management
Risk Management FBNHoldings 17
Slide 18: Sectoral breakdown of loans and advances to customers
Sectoral breakdown of loans and advances to customers H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX H1 2017 FirstBank (Nigeria) gross loans by sectors 5.4% Manufacturing 11.5% [10.6%] 1.1% Construction 4.5% [4.1%] 11.5% 6.1% General commerce 4.0% [3.4%] 4.5% 5.7% Information and c
Slide 19: Profile of the loan book portfolio
Profile of the loan book portfolio H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Loans and advances by maturity Loans and advances by type FirstBank (Nigeria) FirstBank (Nigeria) Overdrafts Term Loans Commercial loans 0 -30 days 1 - 3 months 3 - 6 months 6 - 12 months 1 - 3 years
Slide 20: Asset quality ratios and NPL exposure by sector
Improving asset quality to be sustained through aggressive remediation and recovery efforts H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Asset quality ratios - FBNHoldings NPL N’bn NPL coverage (including statutory credit reserve) Cost of risk NPL ratio N531.7bn N616.7bn N584.2bn
Slide 21: Contact details
Contact details Ag. Head, Investor Relations Tolulope Oluwole Email: Tolulope.O.Oluwole@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051086 +234 (1) 9051386 +234 (1) 9051147 21
Slide 22: Appendix
Appendix FBNHoldings 22
Slide 23: Income statement evolution
Income statement evolution H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Y-o-Y 37.3% 58.3% 46.3% 2.5% 11.8% 15.5% 10.7% 22.4% 38.8% 19.3% 232.4 68.3 50.5 214.6 116.6 97.8 62.4 35.6 6.1 29.5 1 Interest income Interest expense Non-interest Net revenue 1 Operating PPOP Impairment Pro
Slide 24: Revenue Generation
Revenue Generation H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 1 Gross earnings breakdown (Nbn) Net interest margin drivers Interest Income Non Interest Income Cost of funds Loan yield Asset yield Net interest margin (NIM) 14.1% 13.9% +7.8% 12.8% 13.1% 12.3% y-o-y 11.7%8.8% 8.5%
Slide 25: Asset Diversification
Asset Diversification H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 1 FBNHoldings gross loans by business groups 1 FirstBank (Nigeria) & Subsidiaries gross loans 2 Commercial Banking Merchant Banking & Asset Management FirstBank (Nigeria) FBNBank UK FBNBank DRC Others [FY16:2.0%]
Slide 26: Asset quality (1)
Asset quality (1) H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX H1 2017 NPL evolution - FirstBank (Nigeria) N19.6bn N-3.0bn N-149.3bn N478.9bn N346.2bn Opening NPLs Accrued interest on De-classified Written Off Closing NPLs classified assets H1 2017 NPL ratio by sector - FirstBank
Slide 27: Asset quality (2)
Asset quality (2) H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Oil & Gas NPLs NPLs by SBU Nbn FirstBank (Nigeria) FirstBank (Nigeria) Oil & Gas services Oil & Gas downstream Oil & Gas upstream Retail Banking Public Sector Corporate Banking Private Banking Commercial Banking Treas
Slide 28: FBNHoldings' global footprint
FBNHoldings’ global footprint H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Nigeria France Ghana Guinea Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea Type Type Type Type Licensed financial holding Bank branch Licensed Bank Licensed Bank company
Slide 29: Definition of terms
Definition of terms H1 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Leverage ratio computed as total assets divided by total shareholders’ funds ₋ Loans to deposits ratio computed as gross loans divi