Fidelity Bank Plc · NSENG:FIDELITYBK

Fidelity Bank — H1 2016 Earnings Presentation

39 slides from Fidelity Bank's earnings presentation, Jun 30, 2016

  1. Slide 1: Fidelity Bank Investor Presentation

    Fidelity Bank Investor Presentation Unaudited Financial Results for the 6 months ended June 30, 2016 www.fidelitybank.ng

  2. Slide 2: Outline

    Outline 1. The Operating Environment 2. Overview of Fidelity Bank 3. Financial Highlights 4. Financial Review 5. 2016FY Guidance 2 www.fidelitybank.ng

  3. Slide 3: The Operating Environment / Overview of Fidelity Bank

    1. The Operating Environment 2. Overview of Fidelity Bank 3 www.fidelitybank.ng

  4. Slide 4: The Operating Environment

    The Operating Environment General Business Environment Banking Industry Specifics  Headline inflation rate remains high at 16.48% in June  The Monetary Policy Committee (MPC) retained all 2015 from 15.58% in May 2016. policy rates but increased the MPR by 200bpts to 14.0%.  GDP figures for Q2, 20

  5. Slide 5: Overview of Fidelity Bank

    Overview of Fidelity Bank Background Key Highlight  A full service bank with International Authorisation established in 1987 and licensed by the Central Bank of Total Assets N1,397.9 billion Nigeria  The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and cor

  6. Slide 6: Financial Highlights

    3. Financial Highlights 6 www.fidelitybank.ng

  7. Slide 7: Performance Highlights

    Performance Highlights  Total Interest Income up by 2.0% to N57.2 billion in H1 2016 (H1 2015: N56.0 billion) Revenue  Net Fee Income down by 21.4% to N11.9 billion in H1 2016 (H1 2015: N15.2 billion) and  Net Interest Margin at 6.5% in H1 2016 (H1 2015: 6.6% and 2015 FY: 6.9%) Efficiency Ratio 

  8. Slide 8: Financial Highlights

    Financial Highlights  PBT was down by 35.0% YoY (43.9% QoQ), driven largely by N4.1billion increased provision in Q2, 95.9% YoY decline in dividend income on equity investment and 10.0% YoY growth in operating expenses, however, operating expenses dropped by 2.3% in Q2.  Interest expense declined

  9. Slide 9: Financial Highlights: Income Statement H1 2015 vs H1 2016

    Financial Highlights Summary of Income Statement: H1 2015 Vs H1 2016 N’million H1 2015 H1 2016 VAR % VAR Gross Earnings 72,291 70,415 (1,876) -2.6% Interest Income Loans 37,967 41,721 3,755 9.9% Interest Income Liquid Assets 18,060 15,442 (2,618) -14.5% Total Interest Income 56,027 57,163 1,137 2.0%

  10. Slide 10: Financial Highlights: Income Statement Q1 vs Q2 2016

    Financial Highlights Summary of Income Statement: Q1 2016 Vs Q2 2016 N’million Q1 2016 Q2 2016 VAR % VAR Gross Earnings 34,356 36,059 1,704 5.0% Interest Income Loans 20,798 20,923 125 0.6% Interest Income Liquid Assets 8,406 7,036 (1,370) -16.3% Total Interest Income 29,204 27,959 (1,244) -4.3% Int

  11. Slide 11: Financial Highlights: Financial Position 2015 FY vs H1 2016

    Financial Highlights Statement of Financial Position: 2015 FY Vs H1 2016 N’million 2015 FY H1 2016 VAR % VAR Total Assets 1,231,722 1,397,867 166,145 13.5% Earning Assets 879,855 971,521 91,666 10.4% Bank Placements 7,482 - (7,482) -100.0% Treasury Bills 167,231 143,771 (23,460) -14.0% Bonds 126,939

  12. Slide 12: Financial Highlights: Financial Position Q1 vs Q2 2016

    Financial Highlights Statement of Financial Position: Q1 2016 Vs Q2 2016 N’million Q1 2016 Q2 2016 VAR % VAR Total Assets 1,281,240 1,397,867 116,626 9.1% Earning Assets 887,688 971,521 83,833 9.4% Bank Placements 0 0 - 0.0% Treasury Bills 178,693 143,771 (34,922) -19.5% Bonds 118,862 116,611 (2,250

  13. Slide 13: Financial Review – SCI

    4. Financial Review – SCI 13 www.fidelitybank.ng

  14. Slide 14: Gross Earnings Analysis

    Gross Earnings Analysis Key Highlights (N’m) H1 2015 H1 2016 VAR % VAR Total Earnings: H1 2015 Total Earnings: H1 2016 Total Earnings 72,291 70,415 (1,876) -2.6% Maint. Fee/COT, 1% Maint. Fee/COT, 1% E-banking, 3% E-banking, 11% Interest Income Loans 37,967 41,721 3,755 9.9% Others, 10% Others, 5% I

  15. Slide 15: Change in Key Revenue Lines (YoY / QoQ)

    Change in Key Revenue Lines ( YoY / QoQ) Key Revenue Lines in H1 2016: YoY Actual Increase / (Decrease) N'billion 5.5 3.8 0.2 (0.1) (0.2) (0.8) (2.6) (3.4) (4.2) E-banking Int. Income Loans Remittance Trade Income Maintenance Dividend Income Int. Inc. Liquid FX Income Other Income Fee/COT Assets Key

  16. Slide 16: Net Interest Margin Analysis

    Net Interest Margin Analysis NIM Trend  NIM declined to 6.5% from 6.6% in H1 2015 as the reduction in yields on earning assets outpaced the 7.3% decline in funding cost. 6.6% 6.9% 6.9% 6.5%  The drop in yields on earnings assets was 1.9% YoY (1.7% QoQ), driven by a combined drop in average lending

  17. Slide 17: E-Banking Income Analysis

    E-Banking Income Analysis  E-banking income up by 279.4% YoY (85.4% QoQ) Quarterly Revenue Trend principally driven by international card transaction fees N'billion and transaction banking fees on our payment platforms. 4.85  E-banking revenues are likely to decline in Q3 2016 due to the suspensio

  18. Slide 18: Total Expense Analysis

    Total Expense Analysis Key Highlights (N’m) H1 2015 H1 2016 VAR % VAR Total Expenses: H1 2015 Total Expenses: H1 2016 Total Expenses 28,821 31,701 2,879 10.0% Others Exp., 27% Others Exp., 32% Staff Cost 12,970 12,268 -702 -5.4% Staff Cost, 45% Staff Cost, 39% Depreciation 1,923 2,107 185 9.6% Regul

  19. Slide 19: Cost Dynamics

    Cost Dynamics  Total operating expenses increased by 10.0% YoY while it Operating Expenses & Staff Cost dropped by 2.3% QoQ, with advert cost, technology N'billion %Share expenses, regulatory cost, deprecation etc. been the key 35 31.7 50% cost drivers. 28.8 29 46%  Cost to income ratio remained h

  20. Slide 20: Cost Dynamics: Breakdown of Operating Expenses

    Cost Dynamics Breakdown of Operating Expenses: H1 2015 Vs H1 2016 N’million H1 2015 H1 2016 VAR % VAR Staff cost 12,970 12,268 (702) -5.4% Regulatory cost 4,782 4,909 127 2.7% Branding & advert 811 3,738 2,927 360.9% Depreciation 1,923 2,107 185 9.6% Contractor compensation 1,712 1,745 33 1.9% Techn

  21. Slide 21: Cost Optimization Impact in Q2 2016

    Cost Optimization Impact in Q2 2016 Key Cost Drivers in H1 2016: YoY Actual Cost Increase N'billion 2.93 0.80 0.20 0.18 0.13 0.10 0.08 0.07 0.07 0.06 Branding & Technology Repairs and Depreciation Regulatory cost Telephone Corporate Travelling and Security Power advert cost maintenance expenses fina

  22. Slide 22: Financial Review – SFP

    4. Financial Review – SFP 22 www.fidelitybank.ng

  23. Slide 23: Funding Base Analysis

    Funding Base Analysis Key Highlights (N’m) 2015FY H1 2016 VAR % VAR Funding Structure: 2015 FY Funding Structure: H1 2016 Demand Deposits 328,549 455,915 127,366 38.8% Equity, 16% Equity, 14% Savings Deposits 119,140 138,104 18,964 15.9% Debt, 8% Debt, 9% Tenor Deposits 321,947 235,908 (86,039) -26.

  24. Slide 24: Deposits Analysis

    Deposits Analysis  Total deposits increased by 7.8% YTD (5.8% QoQ) to N829.9 Customer Deposits billion with the 40% devaluation accounting for N25.6bn N'billion (3.3% YTD) of the growth. 829.9 25.6  Excluding devaluation, organic/real growth was 4.5% YTD 784.5 769.6 (2.5% QoQ); Demand and savings

  25. Slide 25: Retail Banking Analysis (Personal Banking)

    Retail Banking Analysis (Personal Banking)  Savings deposits grew by 15.9% YTD which contributed to Savings Deposits Trend the decline in our funding cost. N'billion 135.1 138.1  Growth was the combination of the disciplined execution 119.1 of our retail baking strategy and improved cross-selling

  26. Slide 26: Liquid Assets Position

    Liquid Assets Position Short-term Funds Placements Treasury Bills Bonds 22.7% 0.0% 10.3% 8.3% As a % of Total Assets As a % of Total Assets As a % of Total Assets As a % of Total Assets Liquidity Ratio % Total Loans to Customer Deposits 37.5% 85.7% 36.0% 36.3% 75.1% 75.2% 30.0% 30.0% 30.0% 2015 FY Q

  27. Slide 27: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2015FY Vs H1 2016 N’million 2015 FY H1 2016 VAR % VAR Communication 48,298 52,501 4,203 8.7% Oil and Gas 147,407 189,896 42,489 28.8% - Upstream 97,568 133,077 35,509 36.4% - Downstream 23,430 24,289 858 3.7% - Services 26,409 32,53

  28. Slide 28: Loan Portfolio Analysis

    Loan Portfolio Analysis Breakdown of Loans & Advances to Customers Loan Analysis – Q2 2016 N’million Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Agriculture, Real Estate, Others, 1.8% 1.3% 2.9% Communication 74,675 54,584 48,298 50,388 52,501 Communication, Construction, 7.1% Oil and Gas 166,457 155,626

  29. Slide 29: Loan Portfolio Analysis: QoQ Change

    Loan Portfolio Analysis QoQ Change in Loans & Advances to Customers N’million Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Oil & Gas Upstream 1,102 (2,401) (7,143) (2,737) 38,246 Manufacturing 6,462 2,341 (7,474) (3,509) 23,811 Government (666) 1,126 53,479 31,517 14,652 Transport 2,061 (1,088) 1,530 403

  30. Slide 30: Loan Book Analysis

    Loan Book Analysis  Net loans and advances increased by 23.0% YTD (20.5% Net Loans and Advances to Customers QoQ) to N711.1 billion with the devaluation of naira N'billion 711.1 accounting for about 15.6% (N89.9bn) of the loan growth. 578.2 590.1 89.9  Excluding devaluation, real loan growth was 7

  31. Slide 31: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans: 2015 FY Vs H1 2016 2015 FY H1 2016 N’million % Contr. % NPL N’million % Contr. % NPL Communication 1,919 7.3% 4.0% 1,001 4.0% 1.9% Oil and gas 2,319 8.9% 1.6% 3,528 14.0% 1.9% - Upstream - 0.0% 0.0% - 0.0% 0.0% - Downstream 262 1.0% 1.1% 1,40

  32. Slide 32: NPL Portfolio Analysis

    NPL Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – Q2 2016 Real Estate, 4.4% Others, 7.2% N’million Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Communication, 4.0% Communication 4,202 4,168 1,919 1,944 1,001 Agriculture, 2.7% Oil and gas, Oil and Gas 1,206 1,259 2,319 2,350 3,528 14

  33. Slide 33: NPL Analysis

    NPL Analysis  NPL dropped to 3.4% from 4.4% in 2015FY, largely due to Gross Loans and Advances 23.0% YTD growth in total loan book. N'billion  Coverage ratio increased to 101.9% from 79.5% in 2015FY; 736.7 599.0 611.6 92.5 due to increased impairments taken in H1 2016. 25.1 26.1 26.5  Pressure po

  34. Slide 34: Capital Adequacy

    Capital Adequacy Capital Adequacy Ratio Computation – Basel II  Fidelity CAR declined to 16.4% from 18.7% in 2015FY, primarily due to a 18.3% increase in credit risk buoyed by N'million 2015 FY H1 2016 VAR the 40% devaluation of naira. Tier 1 Capital 143,696 143,696 0  However, Fidelity CAR still

  35. Slide 35: Business Segment Analysis

    Business Segment Analysis Business Description  Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. Revenue Deposits Loans Corporate & Investment  Key focus sectors include: 15.7%  Oil & gas upstream  Oil & gas downstream 42.6% Banking  Power & infrastructure  Telecomm

  36. Slide 36: Business Segment Analysis

    Business Segment Analysis Corporate Banking Lagos & SW North South Revenue 42.6% 22.1% 15.4% 19.8% Corporate Banking Lagos & SW North South Deposits 15.7% 35.8% 23.4% 25.0% Corporate Banking Lagos & SW North South Loans 62.4% 7.8% 14.8% 15.0% The Loan mix between Corporate Vs Others is now 64 : 36 a

  37. Slide 37: 2016FY Guidance

    5. 2016FY Guidance www.fidelitybank.ng 37

  38. Slide 38: 2016FY Guidance

    2016FY Guidance GROWTH EXPECTATIONS ON KEY INDICATORS S/N Index H1 2016 Actual 2016FY Target Comment 1 Net Interest Margin 6.5% 6.75% -7.0% Behind Target 2 Tax Rate 11.0% 15% to 20% On Track 3 Loan Growth (YTD) 23.0% 5.0% to 7.5% On Track 4 Deposit Growth (YTD) 7.8% 5.0% to 7.5% On Track 5 Cost - In

  39. Slide 39: Thank You

    Thank You Fidelity Bank Plc 2 Kofo Abayomi Street, Victoria Island, Lagos, Nigeria +234 (01) 4480853 info.investor@fidelitybank.ng www.fidelitybank.ng www.fidelitybank.ng

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