First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2014 Earnings Presentation
35 slides from First Holdco's earnings presentation, 2014
Slide 1: Twelve months ended December 2014 Investors & Analysts Presentation
Twelve months ended December 2014 Investors & Analysts Presentation
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc‟s („FBNH‟ or the „Group‟ or „HoldCo‟) audited IFRS results for the twelve months ended 31 December, 2014. The Group's financial statements have been prepared using the accounts of the subsidiaries and businesses within FBN Holdings. When we u
Slide 3: Outline
Outline Overview & Operating Environment Pg 5 - 10 Financial Review Pg 12 - 23 Business Groups Pg 25 - 29 Outlook Pg 31 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: Challenging regulatory backdrop
Challenging regulatory backdrop OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX • The CBN, following the Monetary Policy Committee (MPC) meeting in November, moved the midpoint of the official window of the foreign exchange (FX) market from N155/US$ to N168/US$ • Increase in cash reserve
Slide 7: Performance snapshot
Performance snapshot OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Income statement • Gross earnings of N480.6bn, up 21.3% year-on-year (Dec 2013: N396.2bn) • Net interest income of N243.9bn, up 6.0% year-on-year (Dec 2013: N230.1bn) • Non-interest income of N111.8bn, up 66.1% year-on-y
Slide 8: 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% 69.8% 62.7% 66.2% 296.4 63.2% 64.9% 64.5% 106.8 90.5 78.0 79.8 Annual Annual 71.6 2013 2014 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 2013 2014 Q4 13 Q1 14 Q2 14
Slide 9: 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 within the next 12 Rigorous stress test on credit facility month
Slide 10: 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 2 Revenue generation Cost strategy - efficiency • Portfolio rebalancing to reallocate assets to higher yielding segments • Cost synergies through key
Slide 11: Financial Review
Financial Review FBNHoldings 11
Slide 12: FY 2014: Overview of income statement
FY 2014: Overview of income statement OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Nbn FY 13 FY 14 y-o-y • 21.3% y-o-y growth in gross earnings to N480.6bn (FY 2013 N396.2bn); largely attributable to growth in interest income from loans and advances to customers Gross Earnings 396.2 48
Slide 13: FY 2014: Overview statement of financial position
FY 2014: Overview statement of financial position OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Structure - December 2014 (Nbn) Nbn FY 13 FY 14 y-t-d N4,343 N4,343 Other assets 5 [N3,869] [N3,869] Total Assets 3,869.0 4,342.7 12.2% 2.4% [2.5%] 105.9 Investment Securities 826.3 735.3 -11
Slide 14: 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 15: Evolution of FY 2014 profit after tax (Nbn)
Evolution of FY 2014 profit after tax (Nbn) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX 12.0% 27.0% 66.1% 19.6% 27.5% FY 2014 FY 2013 ROaE 16.7% 15.5% ROaA 2.0% 2.0% 362.6 118.7 111.8 355.7 236.8 6.9% 27.7% 40.5% 1.7% 51.5% 17.3% 118.2 25.9 0.6 92.9 10.0 82.8 Interest income Interest
Slide 16: Sustainable growth in revenue generation
Sustainable growth in revenue generation OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings (Nbn) • Gross earnings increased by 21.3%; benefitting from the 12.0% growth in Interest Income Non Interest revenue interest income – income on loans and advances to customers (+14.2%)
Slide 17: 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)2 Liquidity Gross loans to deposits ratio Gross loans to total assets ratio 72
Slide 18: Regulatory induced pressure on costs and income
Regulatory induced pressure on costs and income OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income and expenses (Nbn) • Increased regulatory costs, AMCON (+23.7%) and NDIC (17.7%), general admin Operating income expenses (+100%) and staff costs(+21.3%) resulted in a 27.5% in
Slide 19: 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) 2 Growth rate (q-o-q) Other entities FirstBank Interbank Treasury Bills Net Loans and Overdraft Bonds N3,375 10.4% N3,026 N3,064 N3,210 N3,323 9.2%
Slide 20: 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 Gross Loans - Breakdown by Sectors Institutional banking Retail banking Public sector Manufacturing 11% [11%] 3% 3% 3% Corporate banking Commercial Banking Priv
Slide 21: Improving contribution from shorter tenored loans to drive increased income
Improving contribution from shorter tenored 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) 0 -30 days 1 - 3 months 3 - 6 months 6 - 12 months Ov
Slide 22: 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 Asset quality (FBN Holdings) Evolution of credit impairments (FBN Holdings) Impairment charge (N'bn) NPL N‟bn Cost of risk NPL coverage (including statutory credit reserve) PPO
Slide 23: 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 N„bn FY 13 FY 14 y-o-y Gross Earnings 25,069.7 26,990.4 7.7% 23.2% Agriculture, Forestry and Fishing Interest Income 22,036.7 23,726.3 7.7% 9.8
Slide 24: Performance Review - Business Groups
Performance Review - Business Groups Commercial Banking Investment Banking & Asset Management Kakawa Discount House Limited Insurance Microfinance NOTE: The pre-consolidation numbers of each of the business groups have been considered in discussing the performance of each business. 24
Slide 25: 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) Twelve months 2014: • The commercial banking group contributes 93% to FBNH‟s gross revenues 22.1% 455.4 • Gross earnings amo
Slide 26: IBAM – Diversifying revenue streams and deepening customer relationships
IBAM* – Diversifying revenue streams and deepening customer relationships OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Twelve months 2014: • We continue to diversify and grow revenue and PBT 8.6% 23.5 • The largest contribution has come from the IB business, part
Slide 27: Kakawa Discount House Limited
Kakawa Discount House Limited SUMMARY/ OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS STRATEGY APPENDIX OUTLOOK FY 2014: • FBN Holdings acquired a 100% stake of Kakawa Discount House Limited (KDHL) in the fourth quarter of 2014 • This acquisition is motivated by the proposed conversion of KDHL into a Mer
Slide 28: 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) Twelve months 2014: • The insurance business group offers insurance brokerage and composite 6.5 underwriting services to customers. 78.4% • FBN Insuran
Slide 29: 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 – (Nbn) Twelve months 2014: • FBN Microfinance (FBNM) recorded gross earnings and PBT of N1.3bn and +13% 1.3 N283.3mn respectively (FY 2013: N1.1bn
Slide 30: Outlook
Outlook FBNHoldings 30
Slide 31: Outlook – 2015 financial targets
Outlook – 2015 financial targets OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FY 2014 Results 2015 Targets Deposit growth 4.2% ≤ 10% Net loan growth 23.2% ~5% Net interest margin 7.6% 7% – 7.5% Cost to income ratio 66.6% 63% Cost of risk 1.3% 1.5% NPL Ratio 2.9% 3% - 5% ROAE 16.7% 16%
Slide 32: 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 32
Slide 33: Appendix
Appendix FBNHoldings 33
Slide 34: Diversified Financial Holding Company
Diversified Financial Holding Company OVERVIEW FINANCIAL PROFILE STRATEGIC AGENDA SUMMARY APPENDIX FBN Holdings PLC First Bank of Nigeria FBN Insurance FBN Microfinance Bank FBN Capital Limited Limited Limited Limited First Pension Custodian Limited First Trustees Nigeria FBN Insurance Kakawa Discou
Slide 35: GDR Programme
GDR Programme FBN Holdings has a Sponsored Regulation S Global Depositary Receipt (RegS GDR) program • Ticker symbol: 999112Z LI • CUSIP: 31925X302 • ISIN: US31925X3026 • Ratio: 1 GDR : 50 Ordinary Shares • Depositary bank: Deutsche Bank Trust Company Americas • Depositary bank contact: Stanley Jone