First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — H1 2018 Earnings Presentation
32 slides from First Holdco's earnings presentation, 2018
Slide 1: FBNHoldings
FBNHoldings
Slide 2: Disclaimer
Disclaimer This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) unaudited results for the six months ended 30 June, 2018. The Group’s Financial statements have been prepared using the accounts of the subsidiaries and businesses within FBNHoldings. FBNHoldings has
Slide 3: Outline
Outline H1 2018 Key Highlights 04 Financial Review 12 Risk Management 18 Business Group Performance 23 Appendix 28
Slide 4: H1 2018 Highlights
FBNHoldings B- H1 2018 Highlights
Slide 5: Key highlights for the six month period ended 30 June 2018
Key highlights for the six month period ended 30 June 2018 HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Gross earnings of N293.3bn, up 1.6% y-o-y, driven by 21.4% y-o-y growth in non interest income as yields on assets decline Interest income of N225.4bn declined by 3.0% y
Slide 6: Revenue growth driven by increase in non interest income
Revenue growth driven by increase in non interest income HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX INCOME STATEMENT Gross earnings (N bn) Net interest income (N bn) Operating income (N bn) Profit before tax (N bn) 293.3 164.1 214.4 38.9 288.8 149.6 210.9 35.6 H1 17 H1 18 H1
Slide 7: Continued focus on improving asset quality and driving operational efficiencies
Continued focus on improving asset quality and driving operational efficiencies HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX KEY RATIOS NPL ratio Cost of risk NPL coverage CAR1 (Basel 2) 22.8% 6.4% 82.3% 68.2% 18.1% 21.5% 20.8% 4.5% 4.7% 61.9% 18.0% 17.7% FY 17 Q1 18 H1 18 FY
Slide 8: Improving operating environment despite continued volatility
Improving operating environment despite continued volatility HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Growth in GDP as headline inflation moderates Rise in crude oil price and steady production volume support foreign reserves accretion % GDP Growth Inflation growth Externa
Slide 9: An evolving regulatory framework geared to support the pathway to a stable economy
An evolving regulatory framework geared to support the pathway to a stable economy HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX PenCom introduces new RSA CBN in collaboration with multi-fund structure which CBN issued directive to all the office of the Attorney – involves the
Slide 10: On course to deliver in line with our stated strategic objectives
On course to deliver in line with our stated strategic objectives HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX 1 ENHANCE REVENUE GENERATION Non interest income increase underpinned by e-business FirstBank opened a digital laboratory as part of its strategy E-Business con
Slide 11: Steady progress towards achieving set guidance
Steady progress towards achieving set guidance HIGHLIGHTS FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX FY2017 H1 2018 (actual) FY 2018 Guidance (actual) ROaE 7.6% 9 – 10% 10.0% ROaA 1.0% 1 – 1.5% 1.3% Profitability and efficiency metrics Cost to Income 53.5% ≤55% 56.5% Cost of Risk 6.4%
Slide 12: Financial Review
FBNHoldings B- Financial Review
Slide 13: Digital banking initiatives support revenue generation
Digital banking initiatives support revenue generation FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Gross earnings breakdown (Nbn) 1 Net interest margin drivers Interest Income Non Interest Income Cost of funds Asset yield Net interest margin (NIM) +1.6 12.1% 12.3% y-o-y 12.0% 10.5% 10.7
Slide 14: Sustained growth from electronic banking channels resulting in incremental revenue
Sustained growth from electronic banking channels resulting in incremental revenue FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Growing revenue from Digital Banking channels USSD Banking Scheme Mobile Banking Platform (E- business contribution to Non interest Transaction value (N’ billio
Slide 15: Focus remains on driving further efficiencies
Focus remains on driving further efficiencies FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Operating expenses (Nbn) FBNHoldings N238.0 N56.4 N119.3 N116.6 N175.3 56.1% 56.5% 54.4% 53.4% 53.5% H1'17 9M' 17 FY 17 Q1'18 H1' 18 Operating expenses Cost to Income • Operating expenses grew by 2
Slide 16: Strong retail franchise with a well diversified funding base and deep market access
Strong retail franchise with a well diversified funding base and deep market access FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Funding by type (Nbn) Deposits by type (Nbn) FBNHoldings FBNHoldings Deposits from Banks Deposits from customers Financial investment liabilities Current accou
Slide 17: Strong balance sheet provides a platform for future growth
Strong balance sheet provides a platform for future growth FINANCIAL REVIEW RISK MANAGEMENT BUSINESS GROUP APPENDIX Balance sheet efficiency Capital ratios FirstBank (Nigeria) Leverage (times) Gross loans to deposits Liquidity (FirstBank - Nigeria) Total RWA (N'bn) CAR - FBN 74.5% 77.7% 72.5% 67.3%
Slide 18: Risk Management
FBNHoldings B- Risk Management
Slide 19: Sectoral breakdown of loans and advances to customers
Sectoral breakdown of loans and advances to customers RISK MANAGEMENT BUSINESS GROUP APPENDIX H118 FirstBank (Nigeria) gross loans by sector H118 FBNQuest Merchant Bank gross loans by sector Manufacturing 9.9% [10.9%] 2.6% 4.2% Construction 4.9% [4.6%] 2.5% Agriculture 18.4% [9.0%] 9.9% 11.4% Manufa
Slide 20: Diversified risk assets across strategic business lines and groups
Diversified risk assets across strategic business lines and groups RISK MANAGEMENT BUSINESS GROUP APPENDIX FBNHoldings gross loans by business groups1 FirstBank (Nigeria) gross loans by SBU (Nbn) Retail Banking Public Sector [FY17:1.7%] Corporate Banking Commercial Banking Commercial Banking Treasur
Slide 21: Profiling the loan book portfolio
Profiling the loan book portfolio RISK MANAGEMENT BUSINESS GROUP APPENDIX Loans and advances by currency Loans and advances by type FirstBank (Nigeria) FirstBank (Nigeria) FCY LCY Overdrafts Term Loans Commercial loans N1,786 N1,854 N1,838 N1,784 N1,785 3.3% 3.7% 3.0% 3.3% 2.9% 50% 50% 49% 48% 58.2%
Slide 22: Improving asset quality reflected through declining NPLs and stronger loan loss coverage
Improving asset quality reflected through declining NPLs and stronger loan loss coverage RISK MANAGEMENT BUSINESS GROUP APPENDIX Asset quality ratios – FBNHoldings NPL coverage (including statutory credit reserve) NPL ratio Cost of risk 52.7% 57.6% 61.9% 68.2% 82.3% 22.0% 20.1% 22.8% 21.5% 20.8% 5.5
Slide 23: Business Group Performance
FBNHoldings B- Business Group Performance
Slide 24: Performance Review: Commercial Banking Group
Performance Review: Commercial Banking Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross Earnings Nbn Commercial Banking Group Nbn H1 17 H1 18 y-o-y % Gross earnings 261.0 264.7 1.4 CAGR: 1.3% X% Operating income 194.6 190.3 -2.2 Impairment charge 62.4 52.7 -15.5 N251.5 N244.9 N261.
Slide 25: Performance Review: Merchant Bank and Asset Management Group
Performance Review: Merchant Bank and Asset Management Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross Earnings Nmn Merchant Banking and Asset Management Group Nbn H1 17 H1 18 y-o-y % Gross earnings 19,007.0 18,482.2 -2.8 CAGR: -0.5% X% Operating income 10,772.0 9,862.9 -8.4 Impai
Slide 26: Performance Review: Insurance Group
Performance Review: Insurance Group1 BUSINESS GROUP APPENDIX Income statement Evolution of Gross written premium Nmn Insurance Group Nmn H1 17 H1 18 y-o-y % Gross written premium 11,108.1 16,461.8 48.2 CAGR: 31.3% X% Operating income 6,540.5 8,296.1 26.8 Operating expense 4,182.5 4,910.3 17.4 N16,46
Slide 27: Contact details
Contact details Head, Investor Relations Tolulope Oluwole Email: Tolulope.O.Oluwole@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051386 +234 (1) 9051086 +234 (1) 9051147 27
Slide 28: Appendix
FBNHoldings B- Appendix
Slide 29: Results at a glance
Results at a glance APPENDIX Income statement Nbn H1 17 H1 18 y-o-y Key ratios1 H1 17 H1 18 Gross earnings 288.8 293.3 1.6 Net interest margin1 8.5% 7.1% Net interest income 164.1 149.6 -8.8 Cost to income1 54.4% 56.5% Non interest income 50.5 61.3 21.4 Operating income1 214.4 210.9 -1.6 Cost of fun
Slide 30: Income statement evolution
Income statement evolution APPENDIX H1 2018 (Nbn) Y-o-Y 3.0% 10.9% 21.4% 1.7% 2.3% 6.3% 15.4% 9.1% 12.8% 13.7% 225.4 75.8 61.3 211.0 119.3 91.7 52.8 38.9 5.4 33.5 Interest income Interest expense Non-interest Net revenue Operating expenses PPOP Impairment Profit before tax Tax Profit after tax incom
Slide 31: FBNHoldings' global footprint
FBNHoldings’ global footprint APPENDIX Nigeria France Ghana Guinea Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea Type Type Type Type Licensed financial holding Bank branch Licensed Bank Licensed Bank company Established Established Established Established 2008 19
Slide 32: Definition of terms
Definition of terms APPENDIX • Cost-to-income ratio computed as operating expenses divided by operating income • Leverage ratio computed as total assets divided by total shareholders’ funds • Loans to deposits ratio computed as gross loans divided by total customer deposits • Net interest margin def