First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2019 Earnings Presentation
31 slides from First Holdco's earnings presentation, 2020
Slide 1: Forging Ahead
FORGING AHEAD Investor & Analyst Presentation For the full year ended 31 December 2019
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) audited financial statements for the twelve months ended 31 December 2019. The Group’s Financial statements represent FBN Holdings Plc and its subsidiaries. FBNHoldings has obtained some information
Slide 3: Agenda
Agenda 4 2017 – 2019 SPP Overview 10 FY 2019 Performance 21 Outlook 23 Appendix
Slide 4: 2017-2019 SPP Overview
FBNHoldings 2017 — 2019 SPP Overview
Slide 5: Regulatory and macro developments over the last three years
2017 - 2019 SPP Overview Regulatory and macro developments over the course of the last three years 2017 2018 2019 ✓ Fragile recovery from an economic ✓ CBN issued revised guidelines to ✓ CBN unveils 2019-2024 strategic focus recession commercial banks on internal capital and hints on banking sector
Slide 6: 2017-2019 Business plan achievements
2017 - 2019 SPP Overview 2017 – 2019 Business plan achievements: Repositioned the Group for enhanced shareholder value Enhanced Revenue Generation Improved Asset Quality & Strengthened Balance Sheet & Capabilities Revamped Risk Culture Improved Operational Efficiency ✓ Ramped up revenue from digital
Slide 7: Robust top-line performance while optimising balance sheet
2017 - 2019 SPP Overview Robust top-line performance while optimising balance sheet in a challenging operating environment Growth, y-o-y Income Statement Snapshot Statement of Financial Position Gross Earnings Operating Income Total Assets ₦627.0 billion 6.7% ₦449.3 billion 7.7% ₦6,203.5 billion 11.
Slide 8: Improvements in performance; leveraging our strengths
2017 - 2019 SPP Overview Improvements in performance; leveraging our strengths and investing for enhanced value creation over the longer-term Key Income Statement Ratios (%) Key Balance Sheet Ratios (%) Post Tax ROaE Post Tax ROaA Non-Performing Loans 12.4% 1.3% 24.7% 1.1% 22.8% 9.7% 0.9% 7.3% 9.9%
Slide 9: Considerations following COVID-19 pandemic
2017 - 2019 SPP Overview Considerations following COVID-19 pandemic Domestic Developments Our Response ✓ Rising number of confirmed ✓ Other states explore land ✓ A robust Business Continuity ✓ Provided an educational positive COVID-19 cases in border closures and intra-state Plan activated to ensure
Slide 10: FY 2019 Performance
FBNHoldings FY 2019 Performance
Slide 11: Consistent upward trajectory in non-interest income supports total revenue growth
FY 2019 Performance • Gross earnings up 6.7% Consistent upward trajectory in non-interest income supports total revenue growth y-o-y, on the back of growth in non-interest income, as we GROSS EARNINGS BREAKDOWN NON-INTEREST INCOME BREAKDOWN (NET) successfully move (FY 2018: ₦587.4bn; FY 2019: ₦627.0
Slide 12: OpEx elevated due to strategic investments and one-time charges
FY 2019 Performance • Notable investments made OpEx elevated due to strategic investments and one-time charges aimed at improving in security and e-business solutions (revenue operational efficiencies and revenue capabilities accretive), enterprise architecture (business MAIN OPEX DRIVERS stability
Slide 13: Undisputed leader in digital solutions
FY 2019 Performance Undisputed leader in digital solutions with continuous growth and demonstrated track record of monetising same • Successfully monetised GROWING REVENUE FROM DIGITAL BANKING USSD BANKING SCHEME MOBILE BANKING SCHEME digital banking with CHANNELS (₦’ MILLION) TRANSACTION VALUE (₦’
Slide 14: Agent Banking strength and reach
FY 2019 Performance Our Agent Banking strength/reach is unparalleled in the industry leading to increasing customers’ adoptions of our digital banking offerings • >12 million active customers on our digital 53k+ (1) AGENTS (COUNT ‘000) platforms (2018: Agents 9.8million) - FirstMobile, USSD, Interne
Slide 15: Strong retail franchise provides diversified and stable funding base
FY 2019 Performance Strong retail franchise provides the platform for a diversified and stable funding base • Strong funding base; FUNDING BY TYPE | FBNHOLDINGS DEPOSITS BY TYPE | FBNHOLDINGS (FY 2018: ₦5.6tr; FY 2019: ₦6.2tr) (FY 2018: ₦3.5tr; FY 2019: ₦4.0tr) customer deposits up 15.3% y-o-y • Low
Slide 16: Diversified portfolio provides a resilient revenue base
FY 2019 Performance Diversified portfolio provides a resilient revenue base • Focus on quality risk FIRSTBANK (NIGERIA) GROSS LOANS BY SECTOR (FY 2018: ₦1,728.9bn; FY 2019: ₦1,619bn) asset creation to maintain a healthy balance sheet FY 18 24.2% 14.1% 9.9% 10.0% 7.1% 2.4% 7.0% 5.5% 3.5% 4.6% 1.6% 10
Slide 17: Significant improvement in asset quality
FY 2019 Performance Significant improvement in asset quality • Risk portfolio clean-up NPL RATIO COST OF RISK NPL COVERAGE accomplished; focus is on further improving current metrics 3.8% • Significant reduction in 24.7% NPL ratio to single digit, 80.3% 2.5% 9.9% as at Dec 19 47.5% • Vintage NPL rat
Slide 18: Rebalanced portfolio aimed at minimising vulnerability
FY 2019 Performance Rebalanced portfolio aimed at minimising vulnerability • Retooled risk LOANS AND ADVANCES BY MATURITY |FIRSTBANK (NIGERIA) (FY 2018: ₦1,728.9bn; FY 2019: ₦1,619bn) management practice provides greater security and reduces risk 47.5% 47.6% • Increased loans in LCY relative to FCY
Slide 19: Capital Adequacy Ratios remain above regulatory thresholds
FY 2019 Performance Capital Adequacy Ratios remain above regulatory thresholds • Substantial resolution of TOTAL RWA (₦'bn)| FIRSTBANK (NIGERIA) CAR| FIRSTBANK (NIGERIA) the non-performing loans TIER 1 CAPITAL AND CAR| FIRSTBANK (NIGERIA) 3,50 0 positions the Group for accelerated growth in 3,00 0 p
Slide 20: Strengthening the business model to recapture market leadership
FY 2019 Performance Strengthening the business model to recapture market leadership • Addressed legacy asset quality issues to provide platform for growth • Enhanced risk framework and imbedded increased accountability • Enhanced revenue generation capabilities throughout the Group • Improved revenu
Slide 21: Outlook
FBNHoldings
Slide 22: Over the next three years focus on accelerating profitability
Outlook Over the next three years the focus will be on accelerating profitability across our business groups Vision: To be the leading African financial services provider delivering innovative solutions Strategic Ambition: Maximise shareholder value through a diversified portfolio focused on putting
Slide 23: Appendix
FBNHoldings Appendix
Slide 24: Commercial Banking Group
Appendix COMMERCIAL BANKING GROUP Positioned for sustainable profitable growth • Higher top-line revenues KEY FINANCIAL HIGHLIGHTS with significantly lower impairment charges Income statement Statement of Financial Position translated to a strong 83.1% Nbn FY 18 FY 19 y-o-y Nbn FY 18 FY 19 y-o-y y-o
Slide 25: Merchant Banking and Asset Management Group
Appendix MERCHANT BANKING AND ASSET MANAGEMENT GROUP Positive performance amidst macro-economic headwinds driven primarily by fixed income trading, asset • On a normalised basis, 2019 management, trustees and structured products businesses Operating Income & PBT was 2.3% and 4.1% higher than KEY FIN
Slide 26: Insurance Group
Appendix INSURANCE GROUP Positioned for the next phase business growth with a robust balance sheet and enhanced digital capabilities • Increase in operating KEY FINANCIAL HIGHLIGHTS income above opex led Income statement Statement of Financial Position to a 29.1% growth y-o-y on pre-tax profits Nmn
Slide 27: Nigeria's operating environment remained challenging in 2019
Appendix Nigeria’s operating environment remained challenging in 2019 GROSS DOMESTIC PRODUCT RATE TAPERS AMIDST RISING INFLATION CRUDE OIL PRODUCTION CAPACITY INCREASES AS RESERVE POSITION SLOWS DOWN 1.7 1.7 1.8 1.7 1.9 1.9 1.9 15.4 1.8 1.8 13.3 11.3 11.4 11.3 12.0 47.79 11.2 11.2 11.2 46.21 44.31 4
Slide 28: Key regulatory interventions and policies
Appendix Key regulatory interventions and policies further impacted market sentiment NAICOM solicits support of other financial regulatory bodies in its recapitalisation drive of the sector as CBN establishes the 46% of underwriters gets approval to CBN issues guidelines on Shared Agent Network proc
Slide 29: Global Footprint
Appendix Global Footprint Nigeria France UK Ghana Guinea Senegal Name Name Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea FBNBank Senegal Type Type Type Type Type Type Licensed financial holding Bank branch Licensed bank Licensed Bank Licensed Bank
Slide 30: Definitions
Appendix Definitions ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Cost of risk computed as annualised credit impairment charges divided by the average opening and closing gross loans balances ₋ Net-interest margin computed as annualised net interest income divi
Slide 31: Contact Details
Contact Details Head, Investor Relations Tolulope Oluwole : Tolulope.O.Oluwole@fbnholdings.com : +234 (1) 905 2720 Investor Relations Team : investor.relations@fbnholdings.com : +234 (1) 9051086