Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — H1 2013 Earnings Presentation
29 slides from Fidelity Bank's earnings presentation, August 2013
Slide 1: Investor Presentation: Unaudited IFRS Financial Results for Half Year 2013
Investor Presentation Unaudited IFRS Financial Results for the Half Year Ended June 30, 2013
Slide 2: Outline
Outline 1 Fidelity overview 2 Nigerian Economy and Banking Sector overview 3 Business overview 4 Financial highlights 5 Looking into the Future 1 12KLD0346_Client template1 05/08/2013 15:57:31
Slide 3: Fidelity: a leading financial institution in Nigeria
Fidelity: a leading financial institution in Nigeria Fidelity Overview Key Financials Established in 1987 and received a universal banking Balance Sheet as at June 30, 2013 US$ ₦ Assets 6.20bn 965.8bn licence from the Central Bank of Nigeria in 2001 Loans and Advances to Customers 2.45bn 382.3bn
Slide 4: Platform for Growth and Quality
Platform for Growth and Quality Market leading position Experienced Strong franchise management team Consistent financial Sustained quality performance and and asset growth profitability Sound risk Rapidly growing management distribution network practice Transparent corporate governance The Banker M
Slide 5: Outline
Outline 1 Fidelity overview 2 Nigerian Economy and Banking Sector overview 3 Business overview 4 Financial highlights 5 Looking into the Future 4 12KLD0346_Client template1 05/08/2013 15:57:31
Slide 6: Economy: Strong fundamentals, solid growth
Economy: Strong fundamentals, solid growth Annual GDP Growth Rate Annual Foreign Trade Volume N'billion 35,000 33,644 7.98 7.43 7.27 29,069 6.93 27,360 6.61 6.75 28,000 25,862 21,881 21,000 19,658 14,000 7,000 - 2010 2011 2012 2013f 2014f 2015f 2010 2011 2012 2013f 2014f 2015f Source: Nigerian Burea
Slide 7: Stable growth pattern and moderate debt levels
Stable growth pattern and moderate debt levels Comparative Growth Total Debt Stock/Gross Domestic Product % Growth 25 Angola 28.6% Gabon 20 Ghana Nigeria 19.2% Zambia 18.0% 18.3% 15 13.9% 12.4% 11.8% 10 11.7% 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e 2013e 2005 2006 2007 2008 2009 2010
Slide 8: Overview of the top Nigerian banks – Dec 2012
Overview of the top 10 Nigerian banks – Dec 2012 Total Equity Bank Deposits Net Loans and Advances ₦ million ₦ million ₦ million Zenith 462,956 First Bank 1,953,116 First Bank 2,400,860 First Bank 438,847 Zenith 1,929,244 Zenith 989,814 GT Bank 283,441 UBA 1,720,008 GT Bank 783,915 Access 241,494 Ac
Slide 9: Outline
Outline 1 Fidelity overview 2 Nigerian Economy and Banking Sector overview 3 Business overview 4 Financial highlights 5 Looking into the Future 8 12KLD0346_Client template1 05/08/2013 15:57:31
Slide 10: 25 years serving the Nigerian economy
25 years serving the Nigerian economy Strategic alliances with international financial Institutions, award winning innovative products and a vision to become a market leader is the way forward for Fidelity Obtained ISO Fidelity incorporated Accepted by Finalised merger 27001 as a Private Limited
Slide 11: Over 25 Years . . . and getting better
Over 25 Years . . . and getting better Some Recent Awards and Recognitions: Africa Oil & Gas Deal of the Year 2013 – Euromoney Project Finance, UK. Worldwide Award for Excellence in Transaction Processing– Deutsche Bank – 2013 Telecoms Financing Bank of the Year 2012 – Nigeria Telecoms Awards
Slide 12: Growing market share
Growing market share Market Share in Assets and Loans Total Assets Market Share Total Loans and Advances Market Share 4.51% 4.54% 3.96% 3.82% 2.78% 2.41% YE 2010 YE 2011 YE 2012 YE 2010 YE 2011 YE 2012 Source: Bank Audited Accounts, CBN “Downside risk is limited following Fidelity's sale of “Telecom
Slide 13: Corporate banking and Treasury
Corporate banking and Treasury Corporate Banking Treasury Handles the bank’s institutional clients with turnover in Handles the bank’s investments, brokerage activities and the excess of ₦10.0bn. bank’s daily liquidity position Accounted for 35.3% of the bank’s average commercial assets and 29
Slide 14: Commercial and Consumer banking
Commercial and Consumer banking Handles clients not matching the corporate banking criteria Dec 2012 Jun 2013 Commercial Loans as % of Gross Loans 20.0% 22.6% Presence in all 36 states in Nigeria Loans to Individuals as % of Gross Loans 8.0% 9.9% Customers with net sales of less than ₦10.0 bil
Slide 15: Risk management
Risk management Completed the implementation of an enterprise-wide risk Portfolio concentration sector limits management framework in 2011, with Deloitte of South (%) Africa as consultants Agribusiness 9 Finance and Insurance 1 Board committees with executive and non executive General commerce a
Slide 16: Outline
Outline 1 Fidelity overview 2 Nigerian Economy and Banking Sector overview 3 Business overview 4 Financial highlights 5 Looking into the Future 15 12KLD0346_Client template1 05/08/2013 15:57:31
Slide 17: Performance highlight
Performance highlight 6th largest bank in Nigeria One of the safest Nigerian bank with strong Capital Base Fidelity Brand Successful issue of $300 million Eurobond which was over subscribed Stable, experienced and well regarded management team Revenue Gross Earnings up 17.4% to N62.9 billi
Slide 18: Fidelity Bank IFRS Results
Fidelity Bank IFRS Results Financial Highlight (Naira in million) H1 -2013 H1 - 2012 % Change Gross Earnings 62,904 53,579 17.4% Interest & Discount Income 45,814 40,241 13.8% Net Interest Income 18,740 20,179 -7.1% Non-interest Income 17,090 13,338 28.1% Operating Expense (23,724) (23,182) 2.3% Pro
Slide 19: Efficiency ratio
Efficiency ratio Earnings grew on the back of improving market Interest & Discount Income conditions, loan quality, prudent balance sheet N'billion management and cost management 45.8 40.2 Though Interest and Discount Income came in at 13.8% growth, accrued interest on Fidelity Eurobond 20.2 18.
Slide 20: Cost dynamics
Cost dynamics Focus on cost management reined in operating Operating Expenses & Staff Cost expenses despite opening 16 new branches in the N'billion % Share last 12 months 25 50% 47.9% 24 23.7 48% Staff cost is being reduced with technological upgrade 23.2 23 46% and increased efficiency in bran
Slide 21: Diversified loan book
Diversified loan book Loan expansion in H1-2013 reflects the bank’s Net Loans and Advances to Customers intention to increase market share in the credit market through penetration in selected key market segments. N'billion 368.0 Focus remains on businesses/sectors with strong 274.5 growth potent
Slide 22: Improving loan quality
Improving loan quality With over ₦10.4bn recovered in 2012FYE and ₦1.1bn Composition of Loan Recoveries in H1-2013, recoveries are resulting in increased N395.0m N714.2m liquidity and improvement in NPL ratio Whilst credit monitoring and selective exposure have 43% helped in improving loan book
Slide 23: Strong funding base
Strong funding base Funding structure is predominantly customer deposits Funding Structure but equity level is sufficient to cushion the impact of any potential liability/asset mismatch ₦736.9bn ₦914.4bn ₦965.8bn Deposit expansion is driven by increased exposure to 0.0% 0.0% 6.8% buoyant sectors
Slide 24: Sound liquidity position
Sound liquidity position Fidelity has huge investment in high earning safe assets in Liquidity Ratio interbank and government securities High interbank rates and good returns from tax-free 47.2% 50.7% government securities provide good and safe outlets for the bank’s funds 30.0% 30.0% Loan to
Slide 25: Capital adequacy
Capital adequacy Fidelity is well capitalized and has maintained a strong Capital Adequacy Ratio Capital Adequacy Ratio (CAR) above regulatory N'billion 180 164.6 40% minimum 141.7 135 30% At current CAR level, capital is sufficient to support 29.0% 26.6% business risks and growth objectives as
Slide 26: Outline
Outline 1 Fidelity overview 2 Nigerian Economy and Banking Sector overview 3 Business overview 4 Financial highlights 5 Looking into the Future 25 12KLD0346_Client template1 05/08/2013 15:57:31
Slide 27: Strategic outlook
Strategic outlook Become one of the top five banks by returns by 2018 Enhanced physical and Focus on fast growing Maintain a leading position electronic distribution economic sectors to enhance through organic growth and capabilities the bank’s standing opportunistic acquisition Improve customer
Slide 28: Growth expectations
Growth expectations GROWTH EXPECTATIONS ON KEY INDICATORS S/N INDEX TARGET 2013 – 2015 RATIONALE 1 Net Interest Margin Targeting 7% Based on low cost deposits and earning assets growth expectations Targeting an effective tax Based on the impact of amended tax laws on Govt. Securities and Tax Rate 2
Slide 29: Thank You
MP riveniry Thank You