First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — 9M 2017 Earnings Presentation
30 slides from First Holdco's earnings presentation, 2017
Slide 1: Investor & Analyst Presentation
Investor & Analyst Presentation Nine months ended 30 September 2017
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘the company’ or the ‘Group’) unaudited results for the nine months ended 30 September, 2017. The Group’s Financial statements have been prepared using the accounts of the subsidiaries and businesses within FBNHoldings. The compa
Slide 3: Outline
Outline 9M 2017 Key Highlights Pg 4-12 Financial Review Pg 13 - 18 Risk Management Pg 19 - 22 Appendix Pg 24- 30 Appendix Pg 24- 31 3
Slide 4: 9M 2017 Key Highlights
FBNHoldings 9M 2017 Key Highlights
Slide 5: Modest improvements in macroeconomic indices with sustained FX interventions
Modest improvements in macro economic indices with sustained foreign currency interventions 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Marginal growth in Gross Domestic Product with Accretion to foreign reserves following increased reduced inflationary pressure crude oil price
Slide 6: Monetary policy rate maintained; key regulatory developments
Monetary policy rate maintained for the fifth consecutive time in 2017 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX KEY REGULATORY DEVELOPMENTS AUGUST SEPTEMBER PenCom and FRC1 Central Bank issues CBN enforces Review of daily and CBN guides banks directs PFAs to exposure draft on
Slide 7: Resilient revenue generating capacity sustained from a stronger balance sheet
Resilient revenue generating capacity is sustained from a stronger balance sheet 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX INCOME STATEMENT KEY HIGHLIGHTS Gross Net interest Operating • Resilient revenue generating Profit before capacity with a 5.2% y-o-y earnings income incom
Slide 8: Improvement in asset quality and operational efficiencies
Improvement in asset quality and operational efficiencies 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX KEY RATIOS KEY HIGHLIGHTS • Persistent improvement in asset quality metrics NPL ratio1 Cost of risk NPL coverage CAR2 (Basel 2) 9M17: 20.1% 9M17: 57.6% • Improving efficiency tr
Slide 9: Steady progress in strengthening the fundamentals of the Group (Commercial Banking Group)
Steady progress in strengthening the fundamentals of the Group (Commercial Banking Group) 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Good progress in strengthening credit approval processes as well as improving asset quality, Risk Management and remediation and associated met
Slide 10: Steady progress in strengthening the fundamentals (MBAM and Insurance Group)
1 Steady progress in strengthening the fundamentals of the Group (MBAM and Insurance Group) 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Merchant Banking and Asset Management Insurance Group Risk Management and Proactively manage all aspects of risk; Maintained cautious appro
Slide 11: Consistency in delivering sustainable performance
Consistency in delivering sustainable performance 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 9M 2017 Actual FY 2017 guidance NPL: 20.1% ≤20% Cost of Risk: 5.6% 6-7% Cost to Income: 53.4% ≤55% Steady progress in RoAE: 10.1% ≥10% performance Net Interest Margin: 8.8% 8-8.5% Cost
Slide 12: Our 2017-2019 Strategic outlook
Our 2017 - 2019 Strategic outlook 9M 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% • Return on Equity >20% Process Rebuilding the Group for Enhanced Technology Shareholder • Digital Banki
Slide 13: Financial Review
Financial Review FBNHoldings 13
Slide 14: 9M 2017 results snapshot
9M 2017 results snapshot 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Income statement Nbn 9M 16 9M 17 y-o-y Key ratios1 FY 16 9M 16 9M 17 Gross earnings 417.4 439.2 5.2 Net interest margin 8.8% 7.5% 8.8% Net interest income 202.9 254.3 25.3 Cost to income 47.0% 48.4% 53.4% Non-i
Slide 15: Underlying improvement in cost efficiency moderated by operating environment
Underlying improvement in cost efficiency moderated by the current operating environment 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Cost to Income – 9M 2017: 53.4% [9M 2016: 48.4%] Adjusting for Foreign exchange Operating expenses (Nbn) revaluation gains, cost to income : 53.5%
Slide 16: Improved yields on interest earning assets and loan book optimisation
Improved yields on interest earning assets and continuous optimisation of the loan book 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Net Interest Margin Drivers 14.1% 13.9% 14.4% 12.8% 13.1% 8.8% 8.8% 12.1% 12.3% 11.7% 11.7% 8.5% 10.2% 8.2% 7.5% 3.4% 3.5% 3.5% 2.7% 2.8% 9M16 FY 1
Slide 17: Strong retail franchise provides stable, diversified funding base
Sustained strong retail franchise continues to provide stable and well diversified funding base 9M 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 investm
Slide 18: Optimising capital utilisation with efficient balance sheet management
Optimising capital utilisation with efficient balance sheet management 9M 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.
Slide 19: Risk Management
Risk Management FBNHoldings 19
Slide 20: Sectoral breakdown of loans and advances to customers
Sectoral breakdown of loans and advances to customers 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 9M 2017 FirstBank (Nigeria) gross loans by sectors Manufacturing 12.8% [10.6%] 5.1% 11.1% Construction 4.3% [4.1%] 2.2% 5.2% General commerce 4.3% [3.4%] • Net loans and advances de
Slide 21: Profile of the loan book portfolio
Profile of the loan book portfolio 9M 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 22: Steady progress in asset quality
Steady progress in asset quality 9M 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 N616.7bn N584.2bn N624.5bn 531.7 N491.1bn N458.1bn 58.8% 57.6% 57.3% 52.7% 43.6% 24.9
Slide 23: Contact details
Contact details 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 23
Slide 24: Appendix
Appendix FBNHoldings 24
Slide 25: Income statement evolution
Income statement evolution 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 9M 2017 (Nbn) Y-o-Y 27.8% 34.4% 43.5% 1.7% 8.4% 11.3% 14.9% -3.5% 35.8% 7.8% 356.1 101.7 74.0 328.4 175.3 152.8 97.6 45.8 55.4 9.6 1 Interest income Interest expense Non-interest Net revenue Operating PPOP Im
Slide 26: Revenue Generation
Revenue Generation 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX 1 2 Gross earnings breakdown (Nbn) Net interest margin drivers Interest Income Non Interest Income Cost of funds Asset yield Net interest margin (NIM) +5.2 12.3% y-o-y 12.1% 11.7% 11.7% 10.2% N582 177 N439 8.8% 8.5%
Slide 27: Asset Diversification
Asset Diversification 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX FBNHoldings gross loans by business groups 1 1 FirstBank (Nigeria) & Subsidiaries gross loans 2 Commercial Banking Merchant Banking & Asset Management FirstBank (Nigeria) FBNBank UK FBNBank DRC Others [FY16:2.0%]
Slide 28: Asset quality
Asset quality 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX Oil & Gas NPLs (Nbn) 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 T
Slide 29: FBNHoldings' global footprint
FBNHoldings’ global footprint 9M 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 30: Definition of terms
Definition of terms 9M 2017 KEY HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT APPENDIX ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Cost of funds computed as annualised interest expense divided by average interest bearing liabilities ₋ Leverage ratio computed as