First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — H1 2014 Earnings Presentation
34 slides from First Holdco's earnings presentation, August 2014
Slide 1: Connected: Growth through connected solutions
Connected Growth through connected solutions Half year ended June 2014 Investor & Analyst Presentation
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or the ‘Group’ or ‘HoldCo’) unaudited IFRS results for the six months ended 30 June, 2014. The Group's accounts have been prepared using the accounts of the subsidiaries and businesses within FBN Holdings. When we use the term “Firs
Slide 3: Agenda: Overview, Financial Review, Business Groups, Outlook
Overview & Operating Environment Bello Maccido – CEO, FBN Holdings Pg 5 - 8 Wale Ariyibi – Head, Finance FBN Holdings Pg 10- 18 Financial Review Biodun Odubola – Chief Risk Officer, FirstBank Pg 19 - 21 Bisi Onasanya – GMD/CEO, FirstBank Business Groups Kayode Akinkugbe – MD, FBN Capital Pg 23- 27 O
Slide 4: Overview & Operating Environment
Overview & Operating Environment 4
Slide 5: Tough operating environment impacting earnings despite fairly stable macroeconomic backdrop
Tough operating environment impacting earnings despite fairly stable macroeconomic backdrop OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Macro Factors Impact on FBN Holdings • Global GDP is expected to grow at 2.85% in 2014, emerging and developing markets remain key drivers with impro
Slide 6: Diversified Group with growing international presence
Diversified Group with growing international presence OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FBN Holdings PLC First Bank of Nigeria FBN Life Assurance FBN Microfinance FBN Capital Limited Limited Limited Bank Limited First Pension Custodian Limited First Trustees Nigeria FBN Insu
Slide 7: Leading distribution network in Nigeria and increased international presence
Leading distribution network in Nigeria and increased international presence OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX High retail presence with innovative service offerings • Total assets of N4,002bn (+18.4% vs. H1 2013, +3.4% ytd, +4% q-o-q). Net loans of N1,877bn (+20.7% vs. H1 2
Slide 8: Tough operating environment still prevalent
Tough operating environment still prevalent OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income (Nbn) Cost to income ratio 301.1 296.1 64.3% 62.5% 70.3% 78.7 76.7 79.8 63.2% 66.0% 70.3 70.4 78.0 58.2% 58.2% 64.4% 2012 2013 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 2012 Annual 2013
Slide 9: Financial Review
FBNHoldings Financial Review
Slide 10: H1 2014: Overview of income statement
H1 2014: Overview of income statement OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Snapshot of Income Statement Nbn H1 13 H1 14 y-o-y Q1 14 Q2 14 q-o-q • Gross earnings rose 7.9% y-o-y to N211.9bn from N196.4bn in H1 2013, largely due to interest income on loans and advances to custome
Slide 11: H1 2014: Overview statement of financial position
H1 2014: Overview statement of financial position OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Snapshot: Statement of financial position Balance sheet structure - June 2014 (Nbn) H1 13 FY 13 H1 14 N4,002 [N3,871] N4,002 [N3,871] y-o-y ytd (Nbn) (Nbn) (Nbn) Other assets 3.8% [2.8%] 152.
Slide 12: Continued drive for low-cost funds with increase in CRR on public sector deposits
Continued drive for low-cost funds with increase in CRR on public sector deposits OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Deposits by SBU Nbn Deposits by type Nbn (First Bank of Nigeria only) Retail banking Private banking Corporate banking Commercial banking Current accounts Savi
Slide 13: Capital and liquidity levels within regulatory requirements
Capital and liquidity levels within regulatory requirements OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Components of capital (Nbn) Evolution of capital and liquidity ratios Tier 1 Capital Tier 2 Capital2 Total RWA (N'bn) Tier 1 capital ratio 1 Total capital adequacy ratio Liquidity r
Slide 14: Evolution of H1 2014 profit after tax
Evolution of H1 2014 profit after tax (Nbn) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX H1 2014 H1 2013 9.4% 30.8% 0.3% 1.5% 14.3% 18.3% vs. H1 2013 RoAE 15.7% 20.6% RoAA 1.9% 2.8% 164.9 43.2 157.8 49.7 32.9% 6.3% 12.0% 22.6% 19.4% 52.4 0.5 48.3 102.9 37.2 6.7 11.1 Interest income Int
Slide 15: Gross earnings growth despite increasing regulatory headwinds
Gross earnings growth despite increasing regulatory headwinds OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings (Nbn) Interest Income Non Interest revenue • Gross earnings growth supported by higher interest income from loans & advances but tempered by increased CRR requireme
Slide 16: Stable interest regime but with pressure on cost of funds and yields impeding NIM
Stable interest regime but with pressure on cost of funds and yields impeding NIM OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Net interest margin (NIM)1 • Despite the 9.4% growth in interest income, pressure from high growth in interest expense (+30.8%) resulted in net Interest income
Slide 17: Regulatory induced pressure on both top line and costs
Regulatory induced pressure on both top line and costs OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Operating income and expenditure (Nbn) • 14.3% y-o-y increase in H1 2014 opex was driven by: Operating income Operating expenses Cost to Income Ratio ― rise in regulatory costs driven by
Slide 18: Growing loan book will support long term growth
Growing loan book will support long term growth OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Interest earning assets mix (Nbn) FBN Holdings gross loans (Nbn) Interbank AFS-Treasury Bills Net Loans and Overdraft Bonds and HTM Treasury Bills FirstBank Other entities 2 Growth rate (per qu
Slide 19: First Bank of Nigeria (Loan book breakdown)
First Bank of Nigeria (Loan book breakdown) OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Breakdown of loans by SBU Gross Loans Breakdown by Sectors 7 Manufacturing 12% [11%] Institutional banking Retail banking Public sector 3% Corporate banking Commercial Banking Private banking N1,61
Slide 20: FBN UK records improved performance in spite of tough regulatory framework
FBN UK records improved performance in spite of tough regulatory framework OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Selected financial summary Loan book by sector Agriculture, Forestry and Fishing N‘bn H1 13 H1 14 y-o-y Q2 13 Q2 14 y-o-y 10.4% [12.1%] 2% Manufacturing 33.5% [34.2%]
Slide 21: Reduced impairments reflect improved loan structure
Reduced impairments reflect improved loan structure OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Asset quality (FBN Holdings) Evolution of credit impairments NPL N’bn NPL coverage (including statutory credit reserve) NPL coverage (excluding statutory credit reserve) NPL ratio Impairmen
Slide 22: Performance Review - Business Groups
Performance Review - Business Groups Commercial Banking Investment Banking & Asset Management Insurance & Microfinance NOTE: The pre-consolidation numbers of each of the business groups have been considered in discussing the performance of each business. 22
Slide 23: Commercial Banking - Resilient performance despite significant pressures
Commercial Banking - Resilient performance despite significant pressures OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Six months 2014: +8.9% • In H1 2014, despite the challenges in the business environment, the +6.9% 95.2 103.7 business delivered a strong perform
Slide 24: Commercial Banking group – contd’
Commercial Banking group – contd’ OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX • Strong multi-channel expansion with a current distribution network of : - 760 branches, quick service points and cash centres - 10,964 POS; 2,479 ATMs (2437 in Dec 2013); 9.1mn active accounts - 7.9mn tota
Slide 25: IBAM - Improving product mix, enhancing performance
IBAM - Improving product mix, enhancing performance OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nbn) Six months 2014 : • H1 2014 gross earnings and PBT grew by 26.2% and 12.2% y-o-y +78.9% respectively with a corresponding q-o-q growth in gross earnings and PBT +26.2
Slide 26: Insurance Group – Repositioning to capture greater market share
Insurance Group – Repositioning to capture greater market share underpins strong growth OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross income – (Nbn) Six months 2014: +24.8% • Gross income improved 60.3% y-o-y in H1 2014 to N2.7bn (H1 2013: N1.7bn) as a result of the growth in reta
Slide 27: Microfinance – increased customer deposits with focus on quality assets
Microfinance – increased customer deposits with focus on quality assets and fee income in coming period OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Gross earnings – (Nmn) Six months 2014: • FBN Microfinance (FBNM) recorded gross earnings and PBT of N556.7mn +4.1% 284.0 and N154.1mn re
Slide 28: Outlook
FBNHoldings 28
Slide 29: Outlook
Outlook OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX • Enhancing revenue streams through: - Maintaining our e-business leadership position - Consolidating our leadership position while driving targeted improvements on our financial performance and reinforcing our appeal as the financia
Slide 30: Outlook – 2014 financial targets
Outlook – 2014 financial targets OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX FY 2013 Results H1 2014 Results 2014 Targets Deposit growth 6.4% -5.9% 5 -10%* Net loan growth -1.2% 4.0% 10*% Net interest margin 8.0% 7.4% 7 - 8% Cost to income ratio 62.5% 65.2% 60 - 65% Cost of risk 1.2%
Slide 31: 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) 9051146-7 31
Slide 32: Appendix
Appendix FBNHoldings 32
Slide 33: Improving contribution from shorter tenored loans
Improving contribution from shorter tenored loans OVERVIEW FINANCIAL REVIEW BUSINESS GROUPS OUTLOOK APPENDIX Loans and advances by maturity Loans and advances by type (First Bank of Nigeria only) (First Bank of Nigeria only) Overdrafts Term Loans Commercial loans 0 -30 days 1 - 3 months 3 - 6 months
Slide 34: 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