Wema Bank PLC · NSENG:WEMABANK
Wema Bank — H1 2018 Earnings Presentation
28 slides from Wema Bank's earnings presentation, July 2018
Slide 1: Presentation to Analysts & Investors Half Year 2018
\Y] WEMA BANK Presentation to Analysts & Investors Half Year 2018 | #1 Best Mobile Banking |S?! Best Digital Bank ~ lem Nigeria he App Nigeria
Slide 2: Business & Operating Highlights
Business & Operating Highlights Overview of the Bank 03 Review of Operating Environment 04 Policy Highlights 05 Recap of 2018 Commitments 06 ALAT – Full Digital Bank 07 Leadership Transition 08 1 Presentation to Analyst & Investors - Half Year 2018 2
Slide 3: Overview of the Bank
Overview of the Bank Credit Digital Ratings Banking BBB- (SHORT TERM RATING) BBB- (NATIONAL LONG TERM RATING) A3 (LONG TERM RATING) F3 (LONG TERM RATING) Pioneer bank in Earnings Africa to offer a N32.03bn full digital banking experience 5.47% Customer Alternate Base 2.17mn Banking Channels 319 4120
Slide 4: Review of Operating Environment
Review of Operating Environment Global Economy Domestic Economy Federal Govt. Inflow & Inflation & Rates Outflow Global Economic Growth Domestic Economy Oil Price, Reserve & Borrowings Inflation, Interest rates and Markets. • Growth has eased but still • Domestic economy improved • Current account s
Slide 5: Policy Highlights
Policy Highlights CBN stopped the charging of First meeting for the year held. Key rates CBN issues guidelines for commission on retail foreign remained unchanged. $2.5bn currency swap with exchange transactions China CBN signs $2.5bn currency swap with China’s Central Bank JAN FEB MAR APR MAY JUN C
Slide 6: Recap of 2018 Commitments
Recap of 2018 Commitments Priorities Status • Grow deposit volume through Retail and Digital Partnerships. o Deposit volumes increased by 39.4% to N354.88billion (2017; N254.5billion) on the back of continued acceptance of the Wema brand and the improved performance of ALAT our flagship Digital Bank
Slide 7: ALAT Full Digital Bank
Full Digital Bank ALAT has Revolutionized the Banking Space. NNN z 258,007+ N39bn 53,017 614 119,610 Accounts opened Value of transactions Savings Goals Created Goal-Based Loans Cards Issued executed > N2.5bn $113k+ CUSTOMER DEPOSITS N40mn Transaction volume 852 Virtual Card Issued Loans Disbursed 3
Slide 8: Leadership Transition
Leadership Transition Salary for Love In February, staff of the Bank donated a day’s salary to orphanages and elderly homes. Our continued way of saying we care. Outgoing Managing Director/Chief Executive Officer, Acting Managing Director/Chief Executive Officer, Segun Oloketuyi Ademola Adebise • CE
Slide 9: Financial Performance
Financial Performance 2018 Half Year Financial Highlights 10 Earnings Trend 11 Efficiency 12 Efficiency & Margin Analysis Cont’d 13 Deposits 14 Loan Portfolio and Analysis 15 Asset Quality 16 2 Capital Ratio & Funding 17 Stable Performance 18 Presentation to Analyst & Investors - Half Year 2018 9
Slide 10: 2018 Half Year Financial Highlights
2018 Half Year Financial Highlights 2018H1 2017H1 2017FY YOY(%) 2018H1 2017H1 2017FY (YOY)% Gross Earnings N32.03bn N30.37bn N62.68bn 5.47 Deposits N354.88bn N252.00bn N254.50bn 39.44 (customer) PBT N1.81bn N1.43bn N3.05bn 26.60 Loans (net) N223.43bn N206.00bn N215.80bn 3.54 PAT N1.57bn N1.22bn N2.3
Slide 11: Earnings Trend
Earnings Trend Increasing Brand Acceptance Supportive of Earnings Growth Gross Earnings Income Mix (H1’17) Income Mix (H1’18) 35 32.06 N'bn 30.37 30 Non-Interest 24.26 Non-Interest 25 Income 20.83 20.87 16% Income 20 21% 15 10 5 Interest Income Interest Income 84% 79% 0 H1'14 H1'15 H1'16 H1 '17 H1'1
Slide 12: Efficiency
Efficiency Stable Cost Management Operating Expenses Drivers (N’bn) 16 16 N'bn N'bn 14 14 12 12 27.86% (2.47%) 12.67% 10 10 8 8 6 6 4 4 2 2 0 0 H1'14 H1'15 H1'16 H1'17 H1'18 H1'17 Personnel Dep & Amort. Other op. H1'18 exp. Personnel Expenses Dep & Amort Other Operating Exp Operating lease Comments
Slide 13: Efficiency & Margin Analysis
Efficiency & Margin Analysis Yield on Assets Net Interest Margin 20.00% 17.97% 18.24% 9.00% 8.25% 18.00% 16.82% 15.93% 8.00% 7.02% 7.11% 7.24% 16.00% 7.00% 6.01% 14.00% 12.77% 6.00% 12.00% 5.00% 10.00% 4.00% 8.00% 6.00% 3.00% 4.00% 2.00% 2.00% 1.00% 0.00% 0.00% FY'14 FY'15 FY'16 FY17 H1 '18 FY'14 FY
Slide 14: Deposits
Deposits High Interest rate Environment Impact Deposit Growth Deposits (customer) Deposit Mix (H1’18) 400 Domiciliary N'bn 354.88 Accounts 350 3% 300 253.84 251.74 Current 250 234.10 23% 216.31 200 Term 150 58% Savings 100 16% 50 0 H1'14 H1'15 H1'16 H1'17 H1 '18 Deposit Type (H1’18) Comments ▪ The B
Slide 15: Loan Portfolio and Analysis
Loan Portfolio and Analysis Breakdown of Gross Loans and Advances Loan Analysis H12018 H12018 FY2017 6% SECTOR (N'bn) (N'bn) 5% 6% Power and Transportation Energy Agriculture, Forestry & Fishing 5.62 4.38 and Storage Professional, Scientific Capital Market 3.38 2.43 & Technical Services 4% Manufactu
Slide 16: Asset Quality
Asset Quality Net Loans and Loan to Deposit Ratio 400 NPL N'bn 350 300 250 57.6% 65.1% 80.1% 84.2% 63.0% 200 150 100 50 0 FY'14 FY'15 FY'16 FY'17 H1'18 Deposits Net Loans % Loan to Deposit Ratio Low Non-Performing Loans and Adequate Coverage 6.00% 160.00% 5.07% 140.00% 5.00% 120.00% 3.52% Coverage R
Slide 17: Capital Ratio & Funding
Capital Ratio & Funding Capital Adequacy Ratio (N’m) Total Regulatory Capital 24,990.07 Total Risk Weighted Assets 188,280.61 Funding Sources Capital Adequacy Ratio 13.27% Shareholders' fund The Bank is a commercial bank with national authorization license at 10%. 11% Other liabilities 4% Shareholde
Slide 18: Stable Performance
Stable Performance Gross Earnings Deposits (customer) 35 30.4 32.0 400 355 N'bn 30 N'bn 350 285 283 24.3 254 25 300 259 20.8 20.9 250 20 200 15 150 10 100 5 50 0 0 H1'14 H1'15 H1'16 H1'17 H1'18 FY'14 FY'15 FY'16 FY'17 H1'18 Total Assets Loans & advances (net) 460 450 250 227 216 223 N'bn N'bn 440 20
Slide 19: Outlook & Strategy
Outlook & Strategy 2018 Economic Outlook 20 Strategic Thrust 21 Guidance 22 Appendix 23 3 Presentation to Analyst & Investors - Half Year 2018 19
Slide 20: 2018 Economic Outlook
2018 Economic Outlook Global Economy Domestic Economy Domestic Market • Global growth has eased but remains • GDP growth is still largely driven by the • Foreign exchange liquidity to remain robust and is projected to reach 3.9 oil sector while the non oil sector stable in the short term. We believe
Slide 21: Strategic Thrust (2018-2020)
Strategic Thrust (2018-2020) Driving Growth through Digital Capabilities Overall Improving market share and efficiency by Aspiration leveraging digital capabilities Enhance Drive Grow market Transform Digitize Build a High Capital & profitable share in Retail Customer Business and Performing Funding
Slide 22: Guidance
Guidance 2018 FY 2017 Actual HI 2018 Actual H2 2018 Guidance Guidance Customer Deposit Growth (10.19%) 39% 15% *50% Loan Growth (4.92%) 3.5% 10% 10% Non-Interest Income Growth +24.39% 33% 25% *35% Net Interest Margin 6.61% 7.24% 6.5% - 7% *7.5% Cost to Income Ratio (%) 89.90% 88.4% 75% - 80% 75%-80%
Slide 23: Appendix
Appendix 4 Presentation to Analyst & Investors - Half Year 2018 23
Slide 24: Statement Of Profit Or Loss And Other Comprehensive Income
Statement Of Profit Or Loss And Other Comprehensive Income Presentation to Analyst & Investors - Half Year 2018 24
Slide 25: Statement of Financial Position as at December 2017
Statement of Financial Position as at 31 December,2017 Presentation to Analyst & Investors - Half Year 2018 25
Slide 26: The Board of Directors
The Board of Directors Moruf Oseni Segun Oloketuyi Ademola Adebise Executive Director Outgoing Managing Director/Chief Acting Managing Director/Chief Executive Digital Bank Executive Officer Officer Wole Akinleye Folake Sanu Executive Director Executive Director Corporate and South Bank Business Sup
Slide 27: Cautionary Note Regarding Forward Looking Statements
Cautionary Note Regarding Forward Looking Statements • This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the tran
Slide 28: Thank You
Thank You Presentation to Analyst & Investors - Half Year 2018 28