Fidelity Bank Plc · NSENG:FIDELITYBK

Fidelity Bank — Q1 2017 Earnings Presentation

39 slides from Fidelity Bank's earnings presentation, Mar 31, 2017

  1. Slide 1: Fidelity Bank Investor Presentation

    Fidelity Bank Investor Presentation Unaudited Financial Results for the 3 months ended March 31, 2017 www.fidelitybank.ng

  2. Slide 2: Outline

    Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. Q1 2017 Actual Vs 2017 FY Guidance 2 www.fidelitybank.ng

  3. Slide 3: Overview of Fidelity Bank

    1. Overview of Fidelity Bank 42 www.fidelitybank.ng 3

  4. 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 N1,310.9 billion Nigeria  The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor

  5. Slide 5: The Operating Environment

    2. The Operating Environment 38 www.fidelitybank.ng 3

  6. Slide 6: The Operating Environment

    The Operating Environment General Business Environment Banking Industry Specifics  Nigeria’s annual output growth contracted by 1.5%  The Monetary Policy Committee (MPC) kept all policy following a consecutive quarterly negative growth; this rates unchanged in its Mar 2017 meeting. marks the first

  7. Slide 7: Financial Highlights

    3. Financial Highlights www.fidelitybank.ng 6 6

  8. Slide 8: Performance Highlights

    Performance Highlights  Total Interest Income up by 24.1% to N36.2 billion in Q1 2017 (Q1 2016: N29.2 billion) Revenue  Operating Expenses down by 10.4% to N14.4 billion in Q1 2017 (Q1 2016: N16.0 billion) and  Cost-income Ratio down to 72.0% in Q1 2017 from 77.1% in Q1 2016. Efficiency Ratio  P

  9. Slide 9: Financial Highlights

    Financial Highlights  Gross earnings increased by 18.8% YoY to N40.8 billion driven by a combination of increased yields on earning assets and an absolute growth in the volume of earning assets which led to a 24.1% YoY growth in interest income.  However, net interest income increased by 2.8% YoY

  10. Slide 10: Financial Highlights

    Financial Highlights  NIM improved to 6.9% from 6.4% in 2016FY on account of increased yields on earning assets to 15.1% from 12.7% in the 2016FY  Net loans and advances increased by 1.7% YTD to N730.4 billion with cost of risk dropping marginally to 0.4% YoY while our coverage ratio stood at 90.9

  11. Slide 11: Financial Highlights

    Financial Highlights Summary of Income Statement: Q1 2016 Vs Q1 2017 N’million Q1 2016 Q1 2017 VAR % VAR Gross Earnings 34,365 40,842 6,477 18.8% Interest Income Loans 20,798 26,790 5,992 28.8% Interest Income Liquid Assets 8,406 9,440 1,034 12.3% Total Interest Income 29,204 36,230 7,026 24.1% Inte

  12. Slide 12: Financial Highlights

    Financial Highlights Statement of Financial Position: 2016 FY Vs Q1 2017 N’million 2016 FY Q1 2017 VAR % VAR Total Assets 1,298,141 1,310,854 12,713 1.0% Earning Assets 969,925 974,793 4,868 0.5% Bank Placements 13,011 10,000 (3,011) -23.1% Treasury Bills 126,823 114,338 (12,485) -9.8% Bonds 111,978

  13. Slide 13: Financial Review – SCI

    4. Financial Review – SCI 14 www.fidelitybank.ng

  14. Slide 14: Gross Earnings Analysis

    Gross Earnings Analysis Key Highlights (N’m) Q1 2016 Q1 2017 VAR % VAR Total Earnings: Q1 2016 Total Earnings: Q1 2017 Total Earnings 34,365 40,842 6,477 18.8% E-banking, 8% Maint. Fee, 1% Maint. Fee, 1% E-banking, 5% Interest Income Loans 20,798 26,790 5,992 28.8% Others, 5% Others, 4% FX Income, 2

  15. Slide 15: Fee Income Breakdown – Q1 2016 Vs Q1 2017

    Fee Income Breakdown – Q1 2016 Vs Q1 2017 Breakdown of Fees & Commission: Q1 2016 Vs Q1 2017 N’million Q1 2016 Q1 2017 VAR % VAR Int. Income Loans 20,798 26,790 5,992 28.8% Int. Inc. Liquid Assets 8,406 9,440 1,034 12.3% ATM Fees 356 853 496 139.3% Commission On Fidelity Connect 200 502 301 150.3% C

  16. Slide 16: Change in Key Revenue Lines (YoY / QoQ)

    Change in Key Revenue Lines ( YoY / QoQ) Key Revenue Lines in Q1 2017 Vs Q1 2016: YoY Actual Increase / (Decrease) N'billion 5.99 1.03 0.13 0.12 (0.13) (0.22) (0.56) 0.10 Int. Income Int. Inc. Liquid Maintenance Trade Income Dividend- Income Remittance FX Income E-Banking Other Income Loans Assets F

  17. Slide 17: Net Interest Margin Analysis

    Net Interest Margin Analysis  NIM improved to 6.9% in Q1 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. 7.3% 7.0% 6.9%  The yield on earning assets has consistently inched up 6.5% 6.4% since H1 2016, as it gr

  18. Slide 18: E-Banking Income Analysis

    E-Banking Income Analysis  E-banking income dropped by 21.2% YoY largely driven Quarterly Revenue Trend by the stoppage of international transactions on our naira N'billion denominated cards. 4.85  Normalised E-banking income increased by 19.6% (N0.34bn) QoQ, resulting in a high profit margin of 7

  19. Slide 19: Total Expense Analysis

    Total Expense Analysis Key Highlights (N’m) Q1 2016 Q1 2017 VAR % VAR Total Expenses: Q1 2016 Total Expenses: Q1 2017 Total Expenses 16,041 14,365 -1,675 -10.4% Others Exp., Staff Cost, 38% Others Exp., Staff Cost, Staff Cost 6,116 5,256 -861 -14.1% 33% 35% 37% Depreciation 1,038 832 -206 -19.8% Reg

  20. Slide 20: Cost Dynamics

    Cost Dynamics  Our cost optimization initiatives continued to deliver cost Operating Expenses & Staff Cost savings as total operating expenses declined by 10.4% N'billion % Share YoY to N14.4 billion. 20 50% 16.0  Drop in operating cost was driven by a decline in over 60% 14.4 15 45% of our operat

  21. Slide 21: Cost Dynamics – Reduction On 60% Of Expense Lines

    Cost Dynamics – Reduction On 60% Of Expense Lines Breakdown of Operating Expenses: Q1 2016 Vs Q1 2017 N’million Q1 2016 Q1 2017 VAR % VAR Energy (Electricity & Diesel) 265 398 132 49.9% Rent and rates 49 176 126 255.2% Repairs and maintenance 576 691 114 19.8% Legal expenses 29 71 42 144.1% Cash mov

  22. Slide 22: Cost Optimization Impact in Q1 2017

    Cost Optimization Impact in Q1 2017 Key Cost Drivers in Q1 2017 Vs Q1 2016: YoY Actual Cost Increase N'billion 0.13 0.13 0.11 0.04 0.02 0.00 0.00 - (0.01) (0.00) Energy Rent and rates Repairs and Legal expenses Cash Insurance Stationery Litigations and Directors' Security (Electricity & maintenance

  23. Slide 23: Financial Review – SFP

    4. Financial Review – SFP 14 www.fidelitybank.ng

  24. Slide 24: Funding Base Analysis

    Funding Base Analysis Key Highlights (N’m) 2016 FY Q1 2017 VAR % VAR Funding Structure: 2016 FY Funding Structure: Q1 2017 Demand Deposits 469,353 471,284 1,931 0.4% Debt, 10% Equity, 15% Equity, 15% Debt, 10% Savings Deposits 155,019 163,747 8,728 5.6% Tenor Deposits 168,599 165,217 (3,382) -2.0% D

  25. Slide 25: Deposits Analysis

    Deposits Analysis  Total deposits increased by 0.9% YTD to N800.2 billion due Customer Deposits to 5.6% (N8.7 billion) and 0.4% increase in savings and N'billion demand deposits respectively. 793.0 800.2  Low cost deposits now constitute 79.4% of total deposits from 78.7% in 2016FY, however the hi

  26. Slide 26: Retail Banking Analysis (Personal Banking)

    Retail Banking Analysis (Personal Banking)  Savings deposits grew by 5.6% YTD which contributed Savings Deposits Trend significantly to the growth in total deposits. N'billion  The growth was as a result of the disciplined execution of 163.7 155.0 138.1 143.4 our retail banking strategy and improv

  27. Slide 27: Liquid Assets Position

    Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 19.4% 0.8% 8.7% 9.2% 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% 34.4% 33.7% 78.8% 78.7% 33.2% 33.2% 78.0% 78.0% 73.3% 30.0

  28. Slide 28: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2016 FY Vs Q1 2017 N’million 2016 FY Q1 2017 VAR % VAR Communication 43,566 43,881 315 0.7% Oil and Gas 188,217 206,402 18,185 9.7% - Upstream 136,161 135,143 -1,018 - 0.7% - Downstream 18,591 35,551 16,960 91.2% - Services 33,464 3

  29. Slide 29: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – Q1 2017 Real Estate, N’million Q1 2016 Q2 2016 Q3 2016 2016FY Q1 2017 Agriculture, 1.4% Others, 2.4% 2.7% Communication, Communication 50,388 52,501 48,729 43,566 43,881 Construction, 5.8% 3.2% Oil and Gas 147,077 189

  30. Slide 30: Loan Book Analysis

    Loan Book Analysis  Net loans and advances increased by 1.7% YTD to N730.4 Net Loans and Advances to Customers billion as we remained cautious of increasing our N'billion exposure in selected sectors of the economy. 718.1 711.1 729.0 718.1 730.4  In absolute terms, growth was driven principally by

  31. Slide 31: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans: 2016 FY Vs Q1 2017 2016 FY Q1 2017 VAR % VAR 2016 FY Q1 2017 N'million N'million N'million % % NPL % NPL Communication 1,492 1,450 -43 -2.8% 3.4% 3.3% Oil and gas 2,184 2,184 0 0.0% 1.2% 1.1% - Oil & Gas Upstream 0 - 0 #DIV/0! 0.0% 0.0% - Oil

  32. Slide 32: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – Q1 2017 N’million Q1 2016 Q2 2016 Q3 2016 2016FY Q1 2017 Real Estate, 2.4% Others, 5.0% Communication, 3.2% Agriculture, 1.8% Communication 1,944 1,001 1,928 1,492 1,450 Oil and gas, 4.8% Oil and Gas 2,350 3,528 4,537 2,184 2,18

  33. Slide 33: NPL Analysis

    NPL Analysis  NPL ratio improved to 6.1% from 6.6% in 2016 FY due to a Gross Loans and Advances 7.1% drop in absolute NPL figures and the growth in the N'billion loan book. 757.8 743.1 755.9 736.7 25.1 34.1 49.4 45.9 611.6  The decline in absolute NPL volumes was primarily from 26.5 General Commer

  34. Slide 34: Capital Adequacy

    Capital Adequacy  Fidelity CAR declined to 16.7% Q1 2017 from 17.2% in Capital Adequacy Ratio Computation – Basel II 2016FY, however, it still remains well above the regulatory minimum requirement of 15.0%. N'million 2016 FY Q1 2017 VAR Tier 1 Capital 166.1 166.1 0.0  Excluding the N19.1bn charge

  35. Slide 35: Business Segment Analysis

    Business Segment Analysis Business Description  Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. Revenue Deposits Loans Corporate & Investment  Key focus sectors include:  Oil & gas upstream  Oil & gas downstream 14.0% Banking Power & infrastructure  Telecommunicatio

  36. Slide 36: Business Segment Analysis

    Business Segment Analysis Corporate Banking Lagos & SW North South Revenue 48.0% 20.3% 13.2% 18.5% Corporate Banking Lagos & SW North South Deposits 14.0% 33.3% 23.7% 29.0% Corporate Banking Lagos & SW North South Loans 63.2% 9.1% 13.3% 14.5% 36 www.fidelitybank.ng

  37. Slide 37: Q1 2017 Actual Vs 2017FY Guidance

    5. Q1 2017 Actual Vs 2017FY Guidance www.fidelitybank.ng 3

  38. Slide 38: Q1 2017 Actual Vs 2017FY Guidance

    Q1 2017 Actual Vs 2017FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index Q1 2017 Actual 2017FY Target Comment 1 Net Interest Margin 6.9% 6.5% -7.0% On Track 2 Tax Rate 11.0% 15% to 20% On Track 3 Loan Growth (YTD) 1.7% 7.5% Behind Target 4 Deposit Growth (YTD) 0.9% 10.0% Behind Target 5 Cos

  39. 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

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