Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — H1 2020 Earnings Presentation
38 slides from Fidelity Bank's earnings presentation, Jun 30, 2020
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Audited Financial Results for the 6 months ended June 30, 2020 www.fidelitybank.ng
Slide 2: Outline
Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. H1 2020 Actual Vs. 2020FY Guidance 2 www.fidelitybank.ng
Slide 3: 1. Overview of Fidelity Bank
1. Overview of Fidelity Bank www.fidelitybank.ng 3 3
Slide 4: Overview of Fidelity Bank
Overview of Fidelity Bank Ownership 32.0bn Authorized Shares Listings: 28.96bn Shares Total Assets: N2,403bn Issued And 28.96bn Fully Paid $6.2bn 7yr N30bn May 2022 NGN Bonds $400m Oct 2022 Eurobond Professional Staff 2,869 834 ATMs Male: 55% Operations 5.4 Million Female: 45% & Accounts 2.2m Cards
Slide 5: Retail and Digital Banking Evolution / Progress Report
Overview of Fidelity Bank Retail And Digital Banking Evolution / Progress Report Number of Customer Accounts (#’m) Savings deposits (N’bn) Retail Risk Assets (N’bn) 5.3 5.4 363.9 57.2 53.8 51.2 4.5 44.8 3.9 275.2 3.6 228.0 37.6 178.6 155.0 2016 2017 2018 2019 H1 2020 2016 2017 2018 2019 H1 2020 2016
Slide 6: The Operating Environment
2. The Operating Environment 6 www.fidelitybank.ng 3
Slide 7: The Operating Environment
The Operating Environment GDP dropped by -6.1% in Moderate growth in credit to the Q2 from 1.9% in Q1 2020. Private Sector due to rising risk Improving opportunities for key select sectors as Hike in pump price / the economy recovers electricity tariff could spike political risk Yields have stabiliz
Slide 8: COVID-19: Notable Measures Implemented
COVID – 19: Notable Measures Implemented Two Committees headed by Executive Directors were setup to focus on the impact of the pandemic on our Business Strategy and Business Continuity Business Strategy Business Continuity Conducted early assessment of the pandemic Introduced new Covid-19 protoc
Slide 9: 3. Financial Highlights
3. Financial Highlights v 810 www.fidelitybank.ng 3
Slide 10: Financial Highlights
Financial Highlights Gross earnings increased by 2.0% YoY to N105.8bn driven largely by a combination of 17.8% growth in non- interest income to N18.3bn and 2.1% increase in interest and similar income to N87.6bn which accounted for 82.9% of total earnings. Net interest margin (NIM) improved to
Slide 11: Financial Highlights
Financial Highlights Consistent with recent naira devaluations, we now mark our FCY books with an exchange rate of N386.75/$ which had a 1.4% and a 2.8% growth impact on total deposits and net loan book respectively. Total deposits increased by 14.8% YTD to N1,405.9bn from N1,225.2bn in 2019FY a
Slide 12: Performance Highlights
Performance Highlights Net Interest Income up by 31.0% to N48.3 billion in H1 2020 (H1 2019: N36.9 billion) Revenue Operating Expenses up by 8.3% to N46.8 billion in H1 2020 (H1 2019: N43.3 billion) and Cost to Income Ratio dropped to 70.3% in H1 2020 from 73.4% in 2019FY Efficiency Ratio PB
Slide 13: Financial Highlights: Income Statement YoY
Financial Highlights Summary of Income Statement: YoY Change N’million H1 2019 H1 2020 VAR % VAR Gross Earnings 103,655 105,755 2,100 2.0% Interest Income Loans 62,085 63,713 1,628 2.6% Interest Income Liquid Assets 23,745 23,909 164 0.7% Total Interest Income 85,830 87,622 1,792 2.1% Interest Expen
Slide 14: Financial Highlights: Income Statement QoQ
Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2020 Q2 2020 VAR % VAR Gross Earnings 51,159 54,596 3,437 6.7% Interest Income Loans 32,340 31,373 (967) -3.0% Interest Income Liquid Assets 11,586 12,323 737 6.4% Total Interest Income 43,926 43,696 (230) -0.5% Interest Expen
Slide 15: Financial Highlights: Statement of Financial Position
Financial Highlights Statement of Financial Position: YTD Change N’million 2019FY H1 2020 VAR % VAR Total Assets 2,114,037 2,403,234 289,197 13.7% Earning Assets 1,474,252 1,578,092 103,840 7.0% Bank Placements 55,812 70,443 14,631 26.2% Treasury Bills 183,363 206,816 23,453 12.8% Bonds 108,103 91,7
Slide 16: Gross Earnings Analysis
Gross Earnings Analysis N’million H1 2019 H1 2020 VAR % VAR Total Earnings: H1 2019 Total Earnings: H1 2020 Total Earnings 103,655 105,755 2,100 2.0% Maint. Fee, 2% Trade, 1% Maint. Fee, 1% Trade, 1% Digital, 4% Others, 6% Digital, 3% Others, 4% Interest Income Loans 62,085 63,713 1,628 2.6% FX Inco
Slide 17: Net Interest Margin Analysis
Net Interest Margin Analysis NIM improved to 6.4% from 6.2% in 2019FY, largely due a NIM Trend 200bps drop in average funding cost despite a drop in yields on earnings assets. 6.6% 6.4% 6.0% 6.2% Drop in average funding cost was due to a combination of 5.8% 270pbts decline in average cost of dep
Slide 18: Total Expense Analysis
Total Expense Analysis N’million H1 2019 H1 2020 VAR % VAR Total Expenses: H1 2019 Total Expenses: H1 2020 Total Expenses 43,261 46,841 3,580 8.3% Others Exp., Staff Cost, Others Exp., Staff Cost, 32% 27% 31% 26% Staff Cost 11,675 12,190 515 4.4% Depreciation 2,377 3,030 653 27.5% NDIC/AMCON Cost 12
Slide 19: 4. Financial Review - SFP
4. Financial Review - SFP v v 819 www.fidelitybank.ng 3 8
Slide 20: Funding Base Analysis
Funding Base Analysis N’million 2019FY H1 2020 VAR % VAR Funding Structure: 2019FY Funding Structure: H1 2020 Equity, 12% Debt, 9% Equity, 12% Demand Deposits 691,610 706,356 14,746 2.1% Debt, 9% Savings Deposits 275,219 363,920 88,701 32.2% Tenor Deposits 258,384 335,669 77,285 29.9% Demand, 32% Ot
Slide 21: Deposits Analysis
Deposits Analysis Total customer deposits increased by 14.8% to N1,405.9bn Total Deposits from N1,225.2bn in 2019FY. N’billion However, actual growth was 13.4% while the impact of FX 19.6% 23.6% 23.6% 23.7% 21.4% rate adjustment accounted for 1.4% growth in deposits. 1,352.3 1,405.9 1,225.2 LC
Slide 22: Retail Banking Analysis (Personal Banking)
Retail Banking Analysis (Personal Banking) Savings deposits grew by 32.2% YTD and now represent Savings Deposits Trend 25.9% of total deposits from 22.5% in 2019FY. N’billion 22.6% 22.3% 22.5% 23.1% 25.9% Savings has continued to benefit from the current low yield environment especially in the f
Slide 23: Liquid Assets Position
Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 30.6% 2.9% 8.6% 3.8% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio Gross Loans to Funding Ratio 34.8% 35.0% 68.4% 68.2% 65.8% 66.0% 65.9% 32.6% 32.1% 31.6% 30.0% 30.0
Slide 24: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2019FY Vs. H1 2020 N’million 2019FY H1 2020 VAR % VAR Communication 32,416 31,521 -895 - 2.8% Oil and Gas 244,799 309,576 64,778 26.5% - Upstream 132,860 145,864 13,003 9.8% - Downstream 52,203 88,587 36,383 69.7% - Services 59,735
Slide 25: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers by Currency N’million FCY LCY Total % FCY % LCY Communication 1,561 29,961 31,521 0.3% 4.2% Oil and Gas 235,255 74,321 309,576 42.9% 10.3% - Upstream 144,916 948 145,864 26.4% 0.1% - Downstream 33,627 54,959 88,587 6.1% 7.6% - Servic
Slide 26: Loan Portfolio Analysis
Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – H1 2020 Agriculture, 3.0% Others, 5.2% Communication, N’million Q3 2019 Q4 2019 Q1 2020 Q2 2020 2.5% Construction, 2.9% Communication 29,203 32,416 30,121 31,521 Oil & Gas: Oil and Gas 254,790 244,799 281,720 309,576
Slide 27: Loan Book Analysis
Loan Book Analysis Net loans & advances increased by 7.3% YTD to Net Loans and Advances to Customers N1,209.1bn, with 84.1% of the loan book in term loans. N’billion 60.9% 56.4% 58.8% 57.0% 54.3% Adjustment of the exchange rate from N364.7 to N386.8 accounted for 38.4% (N31.5bn) of the loan grow
Slide 28: Loan Book Breakdown – Stage 1|2|3
Loan Book Breakdown – Stage 1|2|3 Breakdown of Loans & Advances to Customers N’million Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Communication 25,936 1,571 4,014 31,521 82.3% 5.0% 12.7% 2.5% Oil and Gas 177,433 112,834 19,309 309,576 57.3% 36.4% 6.2% 24.4% - Upstream 70,937 74,926
Slide 29: CBN Forbearance: Scenario Analysis
CBN Forbearance: Scenario Analysis Breakdown of CBN Forbearance N’million Total Loans Base Moderate Worst Base Moderate Worst Communication 31,521 2,287 4,573 6,860 7.3% 14.5% 21.8% Oil and Gas 309,576 73,428 146,855 220,283 23.7% 47.4% 71.2% - Upstream 145,864 46,581 93,162 139,742 31.9% 63.9% 95.8
Slide 30: NPL Analysis
NPL Analysis NPL ratio (Stage 3 Loans) increased to 4.8% in H1 2020 from Gross Loans and Advances 3.3% in 2019FY due to 58.8% increase in absolute NPL book N'billion to N61.3bn. 1,218.9 1,267.3 1,178.4 NPL growth is primarily due to the early identification of 1,050.2 1,126.5 61.3 38.6 58.1 53.9
Slide 31: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans: 2019FY Vs. H1 2020 2019FY H1 2020 VAR % VAR 2019FY H1 2020 N'million N'million N'million % NPL Ratio NPL Ratio Communication 1,198 4,014 2,816 235.0% 3.7% 12.7% Oil and gas 15,336 19,309 3,973 25.9% 6.3% 6.2% - Oil & Gas Upstream 175 - (175)
Slide 32: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans by Currency N’million FCY LCY Total % FCY % LCY Communication - 4,014 4,014 0.0% 7.4% Oil and Gas 3,881 15,429 19,309 54.9% 28.4% - Upstream - - - 0.0% 0.0% - Downstream 3,803 15,040 18,843 53.8% 27.7% - Services 78 388 467 1.1% 0.7% Power - -
Slide 33: NPL Portfolio Analysis
NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – H1 2020 Communication, Power, 0.0% N’million 9M 2019 2019FY Q1 2020 H1 2020 Others, 10.2% 6.5% Communication 2,417 1,198 3,291 4,014 Construction, 6.3% Oil & Gas: Upstream, 0.0% Oil and Gas 15,621 15,336 16,161 19,309 Oil & Gas:
Slide 34: Capital Adequacy
Capital Adequacy Fidelity CAR is currently at 18.8% which is well above the Capital Adequacy Ratio Computation – Basel II regulatory minimum requirement of 15.0%. Regulatory adjustment increased to N14.6bn due to the N‘billion 2019FY H1 2020 VAR impact of currency adjustments, though it dropped
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 ₦5.0 billion and treasury PBT Deposits Loans business Corporate & Investment Key focus sectors include: 13.5% Banking Treasury Conglomerates 41.1
Slide 36: 5. H1 2020 Actual Vs. 2020FY Guidance
5. H1 2020 Actual Vs. 2020FY Guidance 36 www.fidelitybank.ng 3
Slide 37: H1 2020 Actual Vs. 2020FY Guidance
H1 2020 Actual Vs. 2020FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index H1 2020 Actual 2020FY Target Comment 1 Net Interest Margin 6.4% 5.5% - 6.0% On Track 2 Tax Rate 5.5% 10.0% – 15.0% On Track 3 Loan Growth (YTD) 7.3% 5.0% - 7.5% On Track 4 Deposit Growth (YTD) 14.8% 5.0% - 10.0% On Tr
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