Fidelity Bank Plc · NSENG:FIDELITYBK

Fidelity Bank — 9M 2017 Earnings Presentation

39 slides from Fidelity Bank's earnings presentation, Sep 30, 2017

  1. Slide 1: Fidelity Bank Investor Presentation

    Fidelity Bank Investor Presentation Unaudited Financial Results for the 9 months ended September 30, 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. 9M 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 N1,327.8 billion Nigeria  The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor

  5. Slide 5: Overview of Fidelity Bank

    Overview of Fidelity Bank Rapid deployment of electronic products to drive retail banking penetration Number of Customer Accounts (#’m) Savings deposits (N’bn) Top 5 Retail Banks (KPMG Rating) 3.9 FY’13 – 9M‘17 CAGR: 18% 163.8 75.7 1st Zenith 3.6 155.0 3.3 74.8 2nd GT Bank 2.8 119.1 2.4 98.0 73.6 3r

  6. Slide 6: Operating Environment

    2. Operating Environment www.fidelitybank.ng 6 6

  7. Slide 7: The Operating Environment

    The Operating Environment MPC retains CRR at 22.5% Credit to Private Sector at its September Meeting declining Improving Foreign Stock market on a Reserves recovery path Inflation declining Naira has been relatively stable Monetary Policy GDP on a path to Stability: benchmark economic recovery retai

  8. Slide 8: Financial Highlights

    3. Financial Highlights 38 www.fidelitybank.ng 3

  9. Slide 9: Performance Highlights

    Performance Highlights  Total Interest Income up by 20.7% to N110.4 billion in 9M 2017 (9M 2016: N91.4 billion) Revenue  Operating Expenses down by 2.6% to N47.5 billion in 9M 2017 (9M 2016: N48.7 billion) and  Cost-income Ratio down to 66.8% in 9M 2017 from 73.3% in 9M 2016 Efficiency Ratio  PB

  10. Slide 10: Financial Highlights

    Financial Highlights  Gross earnings increased by 17.9% YoY to N130.1 billion driven by a combination of increased yields on earning assets which led to a 20.7% YoY growth in interest income, and a 7.7% growth in net fee and commission income to N17.2 billion.  Average yield on earning assets rema

  11. Slide 11: Financial Highlights

    Financial Highlights  Total customer deposits declined by 2.3% to N774.4 billion from N793.0 billion in December 2016, principally due to the pay-off of ALL outstanding FCY TSA deposits amounting to N53 billion ($175 million). However, compared to June 2017, total deposits grew by 1.7% (actual grow

  12. Slide 12: Highlights of the Impact of FX Currency Conversion Rate

    Highlights of the Impact of FX Currency Conversion Rate  In line with best market risk practices, our currency conversion rate (CCR) has been changed to reflect a hybrid of the CBN official rate and the Investors and Exporters rate.  This resulted in the Bank’s CCR moving from N306/$ to N333/$, re

  13. Slide 13: Financial Highlights

    Financial Highlights Summary of Income Statement: YoY Change N’million 9M 2016 9M 2017 VAR % VAR Gross Earnings 110,346 130,086 19,739 17.9% Interest Income Loans 68,002 82,199 14,197 20.9% Interest Income Liquid Assets 23,426 28,168 4,742 20.2% Total Interest Income 91,428 110,368 18,940 20.7% Inte

  14. Slide 14: Financial Highlights

    Financial Highlights Summary of Income Statement: QoQ Change N’million Q1 2017 Q2 2017 Q3 2017 VAR % VAR 40,842 44,979 44,265 (714) -1.6% Gross Earnings Interest Income Loans 26,790 26,671 28,738 2,067 7.8% Interest Income Liquid Assets 9,440 9,952 8,776 (1,176) -11.8% Total Interest Income 36,230 3

  15. Slide 15: Financial Highlights

    Financial Highlights Statement of Financial Position: YTD Change N’million 2016 FY 9M 2017 VAR % VAR Total Assets 1,298,141 1,327,827 29,686 2.3% Earning Assets 970,213 978,129 7,916 0.8% Bank Placements 13,011 0 (13,011) -100.0% Treasury Bills 126,823 121,250 (5,573) -4.4% Bonds 111,978 103,081 (8,

  16. Slide 16: Financial Highlights

    Financial Highlights Statement of Financial Position: QoQ Change N’million Q1 2017 Q2 2017 Q3 2017 VAR % VAR Total Assets 1,310,854 1,308,702 1,327,827 19,125 1.5% Earning Assets 974,793 946,942 978,129 31,188 3.3% Bank Placements 10,000 5,615 0 (5,615) -100.0% Treasury Bills 114,338 106,128 121,250

  17. Slide 17: Financial Review – SCI

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

  18. Slide 18: Gross Earnings Analysis

    Gross Earnings Analysis Key Highlights (N’m) 9M 2016 9M 2017 VAR % VAR Total Earnings: 9M 2016 Total Earnings: 9M 2017 Total Earnings 110,346 130,086 19,739 17.9% Maint. Fee, 1% Trade, 1% Maint. Fee, 1% Trade, 1% Interest Income Loans 68,002 82,199 14,197 20.9% E-banking, 8% Others, 4% E-banking, 4%

  19. Slide 19: Net Interest Margin Analysis

    Net Interest Margin Analysis  NIM remained at 7.4% in 9M 2017 from 6.4% in 2016FY NIM Trend despite the reduction in yields on liquid assets towards the end of the quarter. 7.4% 7.4% 7.0% 6.9%  The yield on earning assets dropped marginally from 6.4% 15.1% in 9M from 15.5% in H1 due to a reduction

  20. Slide 20: Total Expense Analysis

    Total Expense Analysis Key Highlights (N’m) 9M 2016 9M 2017 VAR % VAR Total Expenses: 9M 2016 Total Expenses: 9M 2017 Total Expenses 48,741 47,487 -1,254 -2.6% Others Exp., 34% Staff Cost, 38% Staff Cost 18,407 17,139 -1,268 -6.9% Others Exp., 36% Staff Cost, 36% Depreciation 3,241 2,696 -545 -16.8%

  21. Slide 21: Cost Dynamics – YoY Breakdown

    Cost Dynamics – YoY Breakdown Breakdown of Operating Expenses: 9M 2016 Vs. 9M 2017 N’million 9M 2016 9M 2017 VAR % VAR Staff cost 18,407 17,139 (1,268) -6.9% Depreciation 3,241 2,696 (545) -16.8% Bank charges 772 352 (420) -54.4% Technology cost 2,420 2,127 (293) -12.1% Branding & advert 6,776 6,572

  22. Slide 22: Cost Dynamics – QoQ Breakdown

    Cost Dynamics – QoQ Breakdown Breakdown of Operating Expenses: Q2 2017 Vs. Q3 2017 N’million Q2 2017 Q3 2017 VAR % VAR Branding & advert 2,608 2,036 (572) -21.9% Depreciation 946 841 (105) -11.1% Energy (Electricity & Diesel) 346 277 (69) -19.8% Repairs & Maint. 626 584 (42) -6.8% Consultancy expens

  23. Slide 23: Cost Savings Analysis

    Cost Savings Analysis Key Drivers in 9M 2017: YoY Actual Cost Decrease / (Increase) N'billion 1.27 0.55 0.42 0.29 0.20 0.20 0.08 0.07 0.02 0.02 Staff Cost Depreciation Bank charges Technology Branding & Telephone Legal expenses Security Cash Postage and Cost Advert expenses expenses movement courier

  24. Slide 24: Financial Review – SFP

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

  25. Slide 25: Funding Base Analysis

    Funding Base Analysis Key Highlights (N’m) 2016 FY 9M 2017 VAR % VAR Funding Structure: 2016 FY Funding Structure: 9M 2017 Demand Deposits 453,461 405,063 (48,398) -10.7% Equity, 15% Equity, 16% Debt, 10% Savings Deposits 155,019 163,788 8,769 5.7% Debt, 10% Tenor Deposits 184,491 205,531 21,040 11.

  26. Slide 26: Deposits Analysis

    Deposits Analysis  Total deposits declined by 2.3% to N774.4 billion from Customer Deposits N793.0 billion in 2016FY principally due to the pay-off of ALL our outstanding FCY TSA deposits of N53 billion. 793.0 774.4 -  The change in currency conversion rate (CCR) resulted in 138.7 766.9 83.9 7.5 a

  27. Slide 27: Retail Banking Analysis (Personal Banking)

    Retail Banking Analysis (Personal Banking)  Retail loan book has declined by 22% in 2017 (5.7% of Savings Deposits Trend Gross Loans) due to tightened underwriting standards for N'billion the segment in line with the challenging macro environment. 163.7 163.8 161.1 155.0  Total savings deposits in

  28. Slide 28: Liquid Assets Position

    Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 19.8% 0.0% 9.1% 7.8% 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 34.4% 34.4% 80.4% 82.8% 33.2% 33.7% 78.8% 78.0% 78.7% 30.2% 30.0

  29. Slide 29: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2016 FY Vs. 9M 2017 N’million 2016 FY 9M 2017 VAR % VAR Communication 43,566 40,953 -2,613 - 6.0% Oil and Gas 188,217 212,551 24,334 12.9% - Upstream 136,161 145,801 9,640 7.1% - Downstream 18,591 27,482 8,891 47.8% - Services 33,46

  30. Slide 30: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – 9M 2017 Agriculture, Real Estate, Others, 2.2% N’million 2016FY Q1 2017 Q2 2017 Q3 2017 1.4% 3.1% Communication 43,566 43,881 39,934 40,953 Construction, Communication, 5.2% Oil and Gas 188,217 206,402 199,839 212,551

  31. Slide 31: Loan Book Analysis

    Loan Book Analysis  Net loans and advances increased by 4.9% YoY (up from Net Loans and Advances to Customers 4.7% QoQ) to N753.8 billion with the change in currency N'billion conversion rate (CCR) accounting for 3.8% (N27.3bn) of 718.4 753.8 the growth in net loan. 726.5 27.3 319.0 307.7  Excludi

  32. Slide 32: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans: 2016 FY Vs. 9M 2017 2016 FY 9M 2017 VAR % VAR 2016 FY 9M 2017 N'million N'million N'million % NPL Ratio NPL Ratio Communication 1,492 1,713 220 14.8% 3.4% 4.2% Oil and gas 2,184 8,468 6,284 287.8% 1.2% 4.0% - Oil & Gas Upstream 0 - 0 0.0% 0.0

  33. Slide 33: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – 9M 2017 Agriculture, Real Estate, Others, 5.5% N’million 2016FY Q1 2017 Q2 2017 Q3 2017 1.7% 1.5% Communication 1,492 1,450 1,415 1,713 Communication, Construction, 3.7% Oil and Gas 2,184 2,184 2,171 8,468 1.8% Oil and gas, - Up

  34. Slide 34: NPL Analysis

    NPL Analysis  NPL ratio improved to 5.9% from 6.6% in 2016FY due to a Gross Loans and Advances combination of 5.9% (N2.9 billion) drop in absolute NPL N'billion figure and 5.9% (N42.3 billion) increase in total loan book. 785.4 757.8 755.9 749.3 743.1 46.5  Coverage ratio increased to 97.3% from 8

  35. Slide 35: Capital Adequacy

    Capital Adequacy  Fidelity CAR improved to 17.3% in 9M 2017 from 17.2% in Capital Adequacy Ratio Computation – Basel II 2016FY, which puts it well above the regulatory minimum N‘billion 2016 FY 9M 2017 VAR requirement of 15.0%. Tier 1 Capital 166.1 173.7 7.6  The single obligor charge is now N16.0

  36. Slide 36: Strategic Business Units Analysis

    Strategic Business Units Analysis Business Description Location Based Analysis  Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. PBT Deposits Loans Corporate & Investment  Key focus sectors include: 14.1%  Oil & gas upstream  Oil & gas downstream 44.7% Banking  Power

  37. Slide 37: 9M 2017 Actual Vs. 2017 FY Guidance

    5. 9M 2017 Actual Vs. 2017 FY Guidance www.fidelitybank.ng 3

  38. Slide 38: 9M 2017 Actual Vs 2017FY Guidance

    9M 2017 Actual Vs 2017FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index 9M 2017 Actual 2017FY Target Comment 1 Net Interest Margin 7.4% 6.5% -7.0% On Track 2 Tax Rate 11.0% 15% to 20% On Track 3 Loan Growth (YTD) 4.9% 7.5% On Track 4 Deposit Growth (YTD) -2.3% 10.0% - R to 0% Target Revise

  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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