First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — 9M 2018 Earnings Presentation
31 slides from First Holdco's earnings presentation, October 2018
Slide 1: FBNHoldings
FBNHoldings
Slide 2: Disclaimer
Disclaimer This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) unaudited results for the nine months ended 30 September, 2018. The Group’s Financial statements have been prepared using the accounts of the subsidiaries and businesses within FBNHoldings. FBNHoldin
Slide 3: Outline
Outline 9 Months 2018 Key Highlights 04 Financial Review 11 Risk Management 17 Business Group Performance 22 Appendix 27
Slide 4: 9M 2018 Highlights
FBNHoldings B- 9M 2018 Highlights
Slide 5: Staying focused on executing our long-term strategic objectives
Staying focused on executing our long-term strategic objectives HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Non interest income growth gains momentum Continuous progress on NPL resolutions • Improving earnings by optimising digital banking offering • Declining impairment char
Slide 6: Operating environment remains challenging on the back of significant global macro headwinds
Operating environment remains challenging on the back of significant global macro headwinds HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Moderating GDP growth as headline inflation Rise in crude oil price and steady production rises marginally volume support foreign reserves %
Slide 7: Sustained regulatory interventions supporting financial services stability
Sustained regulatory interventions supporting financial services stability HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX CBN introduces additional regulatory guideline for the operation of the redesigned Credit Risk Management Nigerian Stock System (CRMS)1 Exchange (NSE) list g
Slide 8: Revenue driven mainly by non interest income
Revenue driven mainly by non interest income HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX INCOME STATEMENT Gross earnings (N bn) Net interest income (N bn) Operating income (N bn) Profit before tax (N bn) 439.2 441.5 328.1 314.7 254.3 55.4 51.3 221.5 9M 17 9M 18 9M 17 9M 18 9M
Slide 9: Continued focus on improving asset quality and driving operational efficiencies
Continued focus on improving asset quality and driving operational efficiencies HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX KEY RATIOS NPL ratio Cost of risk NPL coverage CAR1 (Basel 2) 22.8% 21.5% 20.8% 6.4% 82.3% 78.5% 17.7% 18.0% 18.1% 19.8% 4.5% 4.7% 4.5% 61.9% 68.2% 17.4
Slide 10: Updated FY 2018 guidance
Updated FY 2018 guidance HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX FY2017 FY 2018 9M 2018 (actual) Guidance (actual) ROaE 7.6% 9 – 10% 8.7% ROaA 1.0% 1 – 1.5% 1.1% Profitability and efficiency metrics Cost to Income 53.5% ~58%* 59.5% Cost of Risk 6.4% 6 – 7% 4.5% Cost of Fu
Slide 11: Financial Review
FBNHoldings B- Financial Review
Slide 12: Digital banking initiatives underpin revenue growth
Digital banking initiatives underpin revenue growth FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Gross earnings breakdown (Nbn)1 Net interest margin drivers 12.3% 11.9% +0.5% 11.7% 10.5% 10.7% y-o-y N595 21% 8.8% 8.4% N439 N442 7.7% 7.2% 7.1% 19% 24% N139 N293 79% 23% 81% 20% 76% 3.5% 3.
Slide 13: Steady growth in electronic banking channels
Steady growth in electronic banking channels FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Growing revenue from Digital Banking channels USSD Banking Scheme Mobile Banking Platform (E- business contribution to Non interest Transaction value (₦’ billion) Transaction value (₦’ billion) Reve
Slide 14: Driving cost management amidst inflationary pressure
Driving cost management amidst inflationary pressure FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Operating expenses (Nbn) FBNHoldings 59.5% 53.4% 53.5% 56.1% 56.5% 175.3 238.0 56.4 119.3 187.2 9M 17 FY 17 Q1 18 H1 18 9M 18 Operating expenses Cost to Income • 9M 2017 operating expenses g
Slide 15: Deposit growth supports a well diversified funding base
Deposit growth supports a well diversified funding base FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Funding by type (Nbn) Deposits by type (Nbn) FBNHoldings FBNHoldings N2,938 N3,143 N3,246 N3,120 N3,384 N4,807 N5,179 N5,293 N5,227 N5,258 14% 15% 15% 17% 14% 13% 13% 13% 16% 12% 29% 29%
Slide 16: Robust funding and liquidity profile supported by adequate capital
Robust funding and liquidity profile supported by adequate capital FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Funding by type (Nbn) Capital ratios FBNHoldings FirstBank (Nigeria) 77.7% 72.5% 67.3% 67.0% 65.9% 17.2% 17.7% 18.0% 18.1% 17.4% 47.4% 51.1% 54.8% 55.0% 42.2% 7.7 8.1 8.0 7.7 7
Slide 17: Risk Management
FBNHoldings B- Risk Management
Slide 18: Improving portfolio diversification
Improving portfolio diversification RISK MANAGEMENT BUSINESS GROUP APPENDIX 9M 18 FirstBank (Nigeria) gross loans by sector 9M 18 FBNQuest Merchant Bank gross loans by sector Manufacturing 12.7% [10.9%] Agriculture 17.6% [9.0%] 2.0% 4.0% Construction 5.0% [4.6%] 2.6% Manufacturing 25.8% [33.4%] 12.7
Slide 19: Diversified risk assets across strategic business lines and groups
Diversified risk assets across strategic business lines and groups RISK MANAGEMENT BUSINESS GROUP APPENDIX FBNHoldings gross loans by business groups1 FirstBank (Nigeria) gross loans by SBU (Nbn) N1,854 N1,838 N1,784 N1,785 N1,832 2% 1% 1% 1% 1% 8% 10% 10% 10% 9% [FY17: 1.7%] 9M18: 2.1% 74% 76% 74%
Slide 20: Profiling the loan portfolio
Profiling the loan portfolio RISK MANAGEMENT BUSINESS GROUP APPENDIX Loans and advances by currency Loans and advances by type FirstBank (Nigeria) FirstBank (Nigeria) N1,854 N1,838 N1,784 N1,785 N1,832 3.7% 3.0% 3.3% 2.9% 3.9% 53.4% 48% 53.1% 50% 50% 49% 51% 58.8% 58.8% 58.2% 42.7% 50% 50% 51% 52% 4
Slide 21: Improving asset quality and stronger balance sheet
Improving asset quality and stronger balance sheet RISK MANAGEMENT BUSINESS GROUP APPENDIX NPL ratios – FBNHoldings Cost of risk ratio – FBNHoldings 82.3% 78.5% 68.2% 61.9% 6.4% 57.6% 5.6% 4.7% 4.5% 4.5% 22.8% 21.5% 20.8% 20.1% 19.8% 9M 17 FY 17 Q1 18 H1 18 9M 18 9M 17 FY 17 Q1 18 H1 18 9M 18 NPL co
Slide 22: Business Group Performance
FBNHoldings B- Business Group Performance
Slide 23: Performance Review: Commercial Banking Group
Performance Review: Commercial Banking Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross Earnings Nbn Commercial Banking Group Nbn 9M 17 9M 18 y-o-y % Gross earnings 398.0 398.7 0.2 CAGR: 2.6% 2018 Performance X% Operating income 298.2 283.9 -4.8 398.0 398.7 Impairment charge 97.6 7
Slide 24: Performance Review: Merchant Banking and Asset Management Group
Performance Review: Merchant Banking and Asset Management Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross Earnings Nmn Merchant Banking and Asset Management Group Nmn 9M 17 9M 18 y-o-y % Gross earnings 27,976.0 27,367.8 -2.2 CAGR: -1.3% 2018 Performance X% Operating income 16,383.
Slide 25: Performance Review: Insurance Group
Performance Review: Insurance Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross written premium Nmn Insurance Group Nmn 9M 17 9M 18 y-o-y % Gross written premium 17,170.5 23,257.8 35.5 CAGR: 27.1% 2018 Performance X% Operating income 9,938.6 12,594.7 26.7 23,257.9 Operating expense
Slide 26: Contact details
Contact details Head, Investor Relations Tolulope Oluwole Email: Tolulope.O.Oluwole@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051386 +234 (1) 9051086 +234 (1) 9051147 26
Slide 27: Appendix
FBNHoldings B- Appendix
Slide 28: Results at a glance
Results at a glance APPENDIX Income statement Nbn 9M 17 9M 18 y-o-y Key ratios1 9M 17 9M 18 Gross earnings 439.2 441.5 0.5 Net interest margin1 8.8% 7.7% Net interest income 254.3 221.5 -12.9 Cost to income1 53.4% 59.5% Non interest income 74.0 93.2 26.0 Operating income1 328.1 314.8 -4.1 Cost of fu
Slide 29: Income statement evolution
Income statement evolution APPENDIX 9M 2018 (Nbn) y-o-y 5.2% 14.2% 25.7% 4.2% 6.8% 16.7% 16.6% 17.2% 33.8% 13.8% 337.6 116.0 93.2 314.8 187.2 127.5 76.2 51.3 6.4 44.9 Interest income Interest expense Non-interest Net revenue Operating expenses PPOP1 Impairment Profit before tax Tax Profit after tax
Slide 30: FBNHoldings’ global footprint
FBNHoldings’ global footprint APPENDIX Nigeria France Ghana Guinea Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea Type Type Type Type Licensed financial holding Bank branch Licensed Bank Licensed Bank company Established Established Established Established 2008 19
Slide 31: Definition of terms
Definition of terms APPENDIX • Cost-to-income ratio computed as operating expenses divided by operating income • Leverage ratio computed as total assets divided by total shareholders’ funds • Loans to deposits ratio computed as gross loans divided by total customer deposits • Net interest margin def