Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — FY2017 Earnings Presentation
38 slides from Fidelity Bank's earnings presentation, 2017
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Audited Financial Results for the 12 months ended December 31, 2017 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. 2017FY 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 N1,379.2 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 3.6 178.6 66.0 3.3 155.0 57.2 2.8 52.8 2.4 119.1 44.8 98.0 34.3 83.3 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015
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 22.4% to N150.7 billion in 2017FY (2016FY: N123.2 billion) Revenue Operating Expenses down by 2.3% to N65.7 billion in 2017FY (2016FY: N67.2 billion) and Cost-income Ratio down to 67.5% in 2017FY from 77.3% in 2016FY Efficiency Ratio PBT up
Slide 10: Financial Highlights
Financial Highlights Gross earnings increased by 18.3% to N179.9 billion on account of double digit growth across key income lines: trade income (61.6%), account maintenance charge (49.8%), interest income on loans (23.1%), FX Income (20.9%) and interest income on liquid assets (20.4%). Net Inte
Slide 11: Financial Highlights
Financial Highlights In line with best market risk practices, Fidelity Bank changed its currency conversion rate (CCR) to a hybrid of the CBN official rate and the Investors and Exporters rate effective Q3 2017. The 2017FY numbers were translated at N333.07. Total customer deposits declined by 2
Slide 12: Summary of Income Statement: YoY Change
Financial Highlights Summary of Income Statement: YoY Change N’million 2016FY 2017FY VAR % VAR Gross Earnings 152,021 179,896 27,875 18.3% Interest Income Loans 92,715 114,091 21,376 23.1% Interest Income Liquid Assets 30,438 36,651 6,213 20.4% Total Interest Income 123,153 150,742 27,589 22.4% Inte
Slide 13: Summary of Income Statement: QoQ Change
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2017 Q2 2017 Q3 2017 Q4 2017 VAR % VAR 40,842 44,979 44,265 49,811 5,546 12.5% Gross Earnings Interest Income Loans 26,790 26,671 28,738 31,892 3,153 11.0% Interest Income Liquid Assets 9,440 9,952 8,776 8,483 (293) -3.3% Tota
Slide 14: Statement of Financial Position: YTD Change
Financial Highlights Statement of Financial Position: YTD Change N’million 2016FY 2017FY VAR % VAR Total Assets 1,298,141 1,379,214 81,073 6.2% Earning Assets 970,213 977,076 6,863 0.7% Bank Placements 13,011 8,475 (4,536) -34.9% Treasury Bills 126,823 90,223 (36,600) -28.9% Bonds 111,978 109,641 (2
Slide 15: Statement of Financial Position: QoQ Change
Financial Highlights Statement of Financial Position: QoQ Change N’million Q1 2017 Q2 2017 Q3 2017 Q4 2017 VAR % VAR Total Assets 1,310,854 1,308,702 1,327,827 1,379,214 51,387 3.9% Earning Assets 974,793 946,942 978,129 977,076 (1,053) -0.1% Bank Placements 10,000 5,615 0 8,475 8,475 100.0% Treasur
Slide 16: 4. Financial Review – SCI
4. Financial Review – SCI 14 www.fidelitybank.ng
Slide 17: Gross Earnings Analysis
Gross Earnings Analysis Key Highlights (N’m) 2016FY 2017FY VAR % VAR Total Earnings: 2016FY Total Earnings: 2017FY Total Earnings 152,021 179,896 27,875 18.3% Maint. Fee, 1% Trade, 1% Maint. Fee, 1% Trade, 1% Interest Income Loans 92,715 114,091 21,376 23.1% E-banking, 7% Others, 4% E-banking, 4% Ot
Slide 18: Net Interest Margin Analysis
Net Interest Margin Analysis NIM improved to 7.3% in 2017FY from 6.4% in 2016FY as the increase in our average yield on earning assets NIM Trend outpaced the increase in average funding cost. 7.4% 7.4% 7.3% The yield on earning assets inched up to 15.4% from 6.9% 6.4% 12.7% in 2016FY driven by h
Slide 19: Total Expense Analysis
Total Expense Analysis Key Highlights (N’m) 2016FY 2017FY VAR % VAR Total Expenses: 2016FY Total Expenses: 2017FY Total Expenses 67,201 65,675 -1,526 -2.3% Others Exp., 35% Others Exp., 35% Staff Cost, 41% Staff Cost, 37% Staff Cost 27,231 24,535 -2,696 -9.9% Depreciation 4,308 4,373 65 1.5% NDIC/AM
Slide 20: Cost Dynamics – YoY Breakdown
Cost Dynamics – YoY Breakdown Breakdown of Operating Expenses: 2016FY Vs. 2017FY N’million 2016FY 2017FY VAR % VAR Staff cost 27,231 24,535 (2,696) -9.9% Branding & advert 9,579 8,173 (1,406) -14.7% Telephone expenses 307 108 (199) -64.8% Training expenses 407 221 (186) -45.7% Litigations and claims
Slide 21: Cost Dynamics – QoQ Breakdown
Cost Dynamics – QoQ Breakdown Breakdown of Operating Expenses: Q3 2017 Vs. Q4 2017 N’million Q3 2017 Q4 2017 VAR % VAR Technology cost 860 280 (579) -67.4% Branding & advert 2,036 1,601 (434) -21.3% Training expenses 123 (29) (152) -123.6% Outsourced cost 998 859 (140) -14.0% Auditors' remuneration
Slide 22: Cost Savings Analysis
Cost Savings Analysis Key Drivers in 2017FY: YoY Actual Cost Decrease / (Increase) N'billion 2.70 1.41 0.20 0.19 0.19 0.09 0.05 0.05 (0.01) 0.02 Staff Cost Branding & Telephone Training Litigations and Security Legal expenses Bank charges Postage and Stationery Advert expenses expenses claims expens
Slide 23: 4. Financial Review – SFP
4. Financial Review – SFP 14 www.fidelitybank.ng
Slide 24: Funding Base Analysis
Funding Base Analysis Key Highlights (N’m) 2016FY 2017FY VAR % VAR Funding Structure: 2016FY Funding Structure: 2017FY Demand Deposits 453,461 418,472 (34,989) -7.7% Debt, 10% Equity, 15% Debt, 14% Equity, 16% Savings Deposits 155,019 178,570 23,551 15.2% Tenor Deposits 184,491 178,234 (6,257) -3.4%
Slide 25: Deposits Analysis
Deposits Analysis Total deposits declined by 2.2% to N775.3 billion from Customer Deposits N793.0 billion in 2016FY principally due to the pay-off of N’billion ALL our outstanding TSA deposits of N53 billion. 793.0 775.3 - 138.7 767.5 87.8 The change in currency conversion rate (CCR) resulted in
Slide 26: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Total savings deposits increased by 15.2% to N178.6 Savings Deposits Trend billion, while it increased by 9.0% QoQ on the back of our N'billion various retail marketing initiatives. 23.0% 19.5% 20.5% 21.2% 21.2% Retail low cost deposits increased by 10.
Slide 27: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 22.7% 0.8% 6.5% 7.9% 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% 78.0% 78.7% 80.4% 33.7% 34.4% 33.2% 30.2% 30.0
Slide 28: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2016FY Vs. 2017FY N’million 2016FY 2017FY VAR % VAR Communication 43,566 37,874 (5,692) -13.1% Oil and Gas 188,217 204,695 16,479 8.8% - Upstream 136,161 148,544 12,382 9.1% - Downstream 18,591 27,362 8,772 47.2% - Services 33,464 2
Slide 29: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – 2017FY Construction, Agriculture, Others, 4.8% N’million Q1 2017 Q2 2017 Q3 2017 Q4 2017 3.5% 1.6% Communication, Communication 43,881 39,934 40,953 37,874 Oil & Gas: 4.8% Oil and Gas 206,402 199,839 212,551 204,695 S
Slide 30: Loan Book Analysis
Loan Book Analysis Net loans and advances increased by 7.0% (0.1% QoQ) Net Loans and Advances to Customers to N768.7 billion with the change in currency conversion N'billion rate (CCR) accounting for 4.0% (N28.9 billion) of the 768.7 718.4 growth in net loans. 739.9 28.9 319.2 324.9 Excluding th
Slide 31: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2016FY Vs. 2017FY 2016FY 2017FY VAR % VAR 2016FY 2017FY N'million N'million N'million % NPL Ratio NPL Ratio Communication 1,492 1,537 44 3.0% 3.4% 4.1% Oil and gas 2,184 13,624 11,441 523.9% 1.2% 6.7% - Oil & Gas Upstream - - - 0.0% 0.0% 0.0%
Slide 32: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – 2017FY Others, 10.6% Communication, Power, 0.0% N’million Q1 2017 Q2 2017 Q3 2017 Q4 2017 Construction, 3.0% Oil & Gas: Communication 1,450 1,415 1,713 1,537 1.8% Upstream, 0.0% Oil and Gas 2,184 2,171 8,468 13,624 Oil & Gas: Se
Slide 33: NPL Analysis
NPL Analysis NPL ratio improved to 6.4% from 6.6% in 2016FY largely due Gross Loans and Advances to a 7.0% increase in the total loan book despite the 2.5% N'billion growth in absolute NPL numbers 795.3 755.9 785.4 743.1 749.3 46.5 50.7 9 sectors recorded an absolute decline of N11.3bn in NPL 45
Slide 34: Capital Adequacy
Capital Adequacy Fidelity CAR is now 16.0% which is above the regulatory Capital Adequacy Ratio Computation – Basel II minimum requirement of 15.0%. N‘billion 2016FY 2017FY VAR The single obligor charge dropped to N15.2 billion due to Tier 1 Capital 166.1 165.3 -0.8 the capitalization of 2017FY
Slide 35: 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 14.2% Banking Power & infr
Slide 36: 5. 2017FY Actual Vs. 2018FY Guidance
5. 2017FY Actual Vs. 2018FY Guidance 42 www.fidelitybank.ng 3
Slide 37: 2017FY Actual Vs. 2018FY Guidance
2017FY Actual Vs. 2018FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 2017FY Actual 2017FY Target Comment 2018FY Target 1 Net Interest Margin 7.3% 6.5% -7.0% Achieved 6.5% - 7.0% 2 Tax Rate 7.1% 15% to 20% Achieved 10.0% - 12.0% 3 Loan Growth (YTD) 7.0% 7.5% Not Achieved 7.5% - 10.0% 4 D
Slide 38: 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