First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — Q1 2015 Earnings Presentation
33 slides from First Holdco's earnings presentation, 2015
Slide 1: Three months ended March 2015 Investors & Analysts Presentation
Three months ended March 2015 Investors & Analysts Presentation
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc‟s („FBNH‟ or the „Group‟ or „HoldCo‟) unaudited IFRS results for the three months ended 31 March, 2015. The Group's financial statements have been prepared using the accounts of the subsidiaries and businesses within FBN Holdings. When we use
Slide 3: Outline
Outline Overview & Operating Environment Pg 5 - 9 Financial Review Pg 11 - 22 Business Groups Pg 24 - 27 Outlook Pg 29 3
Slide 4: Overview & Operating Environment
Overview & Operating Environment 4
Slide 5: Volatile macroeconomic environment
Volatile macroeconomic environment OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 2015 GDP expectations revised downwards Lower oil prices ICE Brent Futures 160 7.0 7.0 7.3 6.9 140 5.9 5.7 5.8 120 5.5 4.8 4.9 100 USD/bbl 80 % 60 40 20 0 Apr-13 Oct-13 Apr-14 Oct-14 Jan-15 Nigerian Real GD
Slide 6: Performance snapshot
Performance snapshot OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Income statement • Gross earnings of N126.8bn, up 23.5% y-o-y (Q1 2014 N102.6bn) • Net interest income of N59.6bn, up 1.3% y-o-y (Q1 2014: N58.8bn) • Non-interest income of N29.3bn, up 51.2% y-o-y (Q1 2014: N19.3bn) • Op
Slide 7: Improving business momentum
Improving business momentum OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income (Nbn) Cost-to-income ratio +19.8% 355.1 66.7% 62.7% 296.4 69.8% 106.8 66.2% 64.9% 64.5% 65.1% 90.5 88.8 78.0 79.8 Annual Annual 2013 2014 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 2013 2014 Q1 14 Q2 14 Q3 14
Slide 8: Key themes impacting our business
Key themes impacting our business OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Capital Requirements Oil Price Decline Commencement of Basel 2 No immediate plans by FBN Holdings to Currency Devaluation raise Tier 1 capital in the short term Sensitised credit facility structures for give
Slide 9: Outlook remains cautiously optimistic; Group operates in attractive markets and segments
Outlook remains cautiously optimistic; Group operates in attractive markets and segments OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 1 Revenue generation 2 Cost strategy - efficiency • Portfolio rebalancing to reallocate assets to higher yielding segments • Cost synergies through key
Slide 10: Financial Review
Financial Review FBNHoldings 10
Slide 11: Q1 2015: Overview of income statement
Q1 2015: Overview of income statement OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Nbn Q1 14 Q1 15 y-o-y • 23.5% y-o-y growth in gross earnings to N126.8bn (Q1 2014: N102.6bn); largely attributable to growth in interest income from loans and advances to Gross Earnings 102.6 126.8 23.5%
Slide 12: Q1 2015: Overview statement of financial position
Q1 2015: Overview statement of financial position OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Structure – March 2015 (Nbn) Nbn FY 14 Q1 15 y-t-d N4,511 N4,511 Other assets 5 [N4,343] [N4,343] Total Assets 4,342.7 4,511.4 3.9% 2.8% [2.4%] 126.1 Investment Securities 735.3 852.3 15.9% P
Slide 13: Healthy low-cost deposits provide stable funding
Healthy low-cost deposits provide stable funding OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Deposits by SBU Nbn Deposits by type Nbn (FirstBank - Nigeria only) Retail banking Private banking Corporate banking Commercial banking Current accounts Savings accounts Term deposits Domicili
Slide 14: Evolution of Q1 2015 profit after tax
Evolution of Q1 2015 profit after tax (Nbn) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 17.0% 57.4% 51.2% 13.7% 11.9% Q1 2015 Q1 2014 ROaE 17.0% 17.9% ROaA 2.0% 2.2% 95.3 35.7 29.3 88.8 57.8 17.8% 138.4% -100% 8.7% 34.6% 4.9% 31.0 4.1 0.0 26.9 4.3 22.6 2 Interest income Interest Non-i
Slide 15: Sustainable growth in revenue generation
Sustainable growth in revenue generation OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings (Nbn) Interest Income Non Interest revenue • Gross earnings increased by 23.5%; benefitting from the 17.0% growth in interest income – income on loans and advances to customers (+16.9%)
Slide 16: NIMs under pressure following increased reserve requirements
NIMs under pressure following increased reserve requirements OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Net interest margin (NIM)1 Balance sheet efficiency • Healthy low-cost deposits Leverage ratio (times)3 Liquidity Gross loans to deposits ratio Gross loans to total assets ratio 72
Slide 17: Reduced cost growth
Reduced cost growth OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income and expenses (Nbn) Operating income breakdown (Nbn) Operating income Operating expenses Cost to Income Ratio • Healthy low-cost deposits Net F&C Foreign exchange income Other income N355.1 provide stable
Slide 18: More efficient balance sheet
More efficient balance sheet OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Interest earning assets mix (Nbn) FBN Holdings gross loans (Nbn) Growth rate (q-o-q) Other entities FirstBank 2 Interbank Treasury Bills Net Loans and Overdrafts Bonds N2,072 10.4% N2,221 N2,170 N3,064 N3,210 N3,
Slide 19: FirstBank - Nigeria only (Loan book breakdown)
FirstBank - Nigeria only (Loan book breakdown) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 7 Breakdown of gross loans by SBU(Nbn) Gross Loans - Breakdown by Sectors 3% Manufacturing 11% [11%] Institutional banking Retail banking Public sector Corporate banking Commercial Banking Priva
Slide 20: Improving contribution from shorter tenor loans to drive increased income
Improving contribution from shorter tenor loans to drive increased income OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Loans and advances by maturity Loans and advances by type (FirstBank - Nigeria only) (FirstBank - Nigeria only) Overdrafts Term Loans Commercial loans 0 -30 days 1 - 3
Slide 21: Robust and effective credit risk management system and framework
Robust and effective credit risk management system and framework OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Evolution of credit impairments (FBN Holdings) Impairment charge (N'bn) NPL N‟bn Cost of risk NPL coverage (including statutory credit reserve) PPOP/credit impairments (times)
Slide 22: FBNBank UK – Continued improvement in performance
FBNBank UK – Continued improvement in performance OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Selected financial summary1 Loan book by sector Nbn Q1 14 FY 14 Q1 15 y-o-y 1.2% 13.9% Gross Earnings 6.6 29.2 7.5 13.6% Agriculture, Forestry and Fishing 11.6% 11.6% [9.8%] Interest Income 5
Slide 23: Performance Review - Business Groups
Performance Review - Business Groups Commercial Banking Investment Banking & Asset Management Insurance Microfinance NOTE: The pre-consolidation numbers of each of the business groups have been considered in discussing the performance of each business. 23
Slide 24: Commercial Banking – Focused on optimising assets, driving long-term growth and profitability
Commercial Banking – Focused on optimising assets, driving long-term growth and profitability OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Three months 2015: • The commercial banking group contributed 92.4% to FBNH‟s gross earnings in 21.1% Q1 2015 117.2 • Gross
Slide 25: IBAM Group – Diversifying revenue streams and deepening customer relationships
IBAM* Group – Diversifying revenue streams and deepening customer relationships OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Three months 2015: 8.9 • The Investment Banking and Asset Management (IBAM) Group comprises of 135.3% investment banking, securities sales
Slide 26: Insurance Group – Inorganic growth provides expanded market access
Insurance Group – Inorganic growth provides expanded market access OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Three months 2015: • The insurance business group offers insurance brokerage and composite 2.4 underwriting services to customers 100.8% • FBN Insuranc
Slide 27: Microfinance – Focus on quality risk assets while increasing fee-based income
Microfinance – Focus on quality risk assets while increasing fee-based income OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nmn) Three months 2015: -4% • FBN Microfinance bank provides microfinance services to the mass-market 272.6 segment 262.4 • FBN Microfinance (FBN
Slide 28: Outlook
Outlook FBNHoldings 28
Slide 29: Outlook – 2015 financial targets
Outlook – 2015 financial targets OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FY 2014 Results Q1 2015 Results 2015 Targets Deposit growth 4.2% 5.1% ≤ 10% Net loan growth 23.2% -2.6% ~5% Net interest margin 7.6% 6.9% 7% – 7.5% Cost to income ratio 66.6% 65.1% 63% Cost of risk 1.3% 0.7%
Slide 30: Contact Details
Contact Details Head, Investor Relations Oluyemisi Lanre-Phillips Email: oluyemisi.lanre-phillips@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051146 +234 (1) 9051386 +234 (1) 9051086 30
Slide 31: Appendix
Appendix FBNHoldings 31
Slide 32: Diversified Financial Holding Company FBN Holdings Plc
Diversified Financial Holding Company OVERVIEW FINANCIAL PROFILE STRATEGIC AGENDA SUMMARY APPENDIX FBN Holdings Plc First Bank of Nigeria Kakawa Discount House FBN Insurance FBN Microfinance Bank Limited Limited Limited Limited First Pension FBN Capital Limited FBN General Custodian Limited Insuranc
Slide 33: GDR Programme
GDR Programme FBN Holdings has a Sponsored Regulation S Global Depositary Receipt (RegS GDR) program • CUSIP: 30190K102 • ISIN: US30190K1025 • Ratio: 1 GDR : 50 Ordinary Shares • Depositary bank: Deutsche Bank Trust Company Americas • Depositary bank contact: Stanley Jones • ADR broker helpline: +1