Wema Bank PLC · NSENG:WEMABANK
Wema Bank — H1 2016 Earnings Presentation
27 slides from Wema Bank's earnings presentation, July 2016
Slide 1: 2016 Half Year Results
2016 HALF YEAR RESULTS Presentation to Analysts and Investors July 2016 1
Slide 2: Section page
section page 1 Business and Operating Highlights 3 2 H1 Financial performance 8 3 Outlook & Strategy 19 2
Slide 3: H1'2016 Highlights
H1’2016 HIGHLIGHTS Continued growth recorded on growing the retail space N24.3bn Earnings BBB- (short term rating) 16.65% A3 (long term rating) Giving customers total Card Credit BBB- (national long term rating) control of their Payment cards Control Ratings F3 (long term rating) BBB-(stable) 1.7 mi
Slide 4: Overview of Operating Environment
Overview of Operating Environment The following changes in the operating environment impacted performance in H1’2016 • Growth in developed economies remains slow; US Global developments continue to have an numbers however show some resurgence. Brexit impact on local economy - Brexit fears impacted o
Slide 5: Updates on 2016 Commitments
Updates on 2016 Commitments OBJECTIVES TASK Grow the Franchise • Grow Deposit volumes within Retail segment of market through campus storms, prepaid accounts, partnership with telcos on agency and mobile banking o (Customer Deposit improved 17% (Y-o-Y) from ₦237.43 billion in the previous period to
Slide 6: Income Statement Highlight
INCOME STATEMENT HIGHLIGHT Gross Earnings (₦’bn) PBT(₦’bn) PAT(₦’bn) H1 2016 24.3 H1 2016 1.3 H1 2016 1.1 GROWTH GROWTH GROWTH 16.27% H1 2015 20.9 H1 2015 H1 2015 0.99 8.33% 1.2 11.11% Operations Income (₦’bn) Operations Expense (₦’bn) Interest Expense (₦’bn) H1 2016 12.69 H1 2016 11.4 H1 2016 11.63
Slide 7: Section page
section page 1 Business and Operating Highlights 3 2 H1 Financial performance 8 3 Outlook & Strategy 19 7
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS H1’2016 H1’2015 2015FY Financial Gross earnings N24.3bn N20.9bn N45.9bn Highlights PBT N1.3bn N1.2bn N3.1bn PAT N1.1bn N0.99bn N2.3bn CAR 13.36% 18.90% 15.10% EPS 6K 5k 6k Deposits N277.87bn N237.43bn N284.98bn Revenue Loans (net) N172.0bn N134.6bn N185.6bn Generation Interest i
Slide 9: Improving Earnings Trend
IMPROVING EARNINGS TREND VW WEMA BANK Gross earnings 50.00 , H172015 40.00 12016 Non-interest 30.00 income < - 2 nega 16% 5. 20.00 income... 0.00 H1'2016 H1'2015 2015FY ulnterest income Non-interest income Interest - Interest i Interestincome Bg Income mInvestment Securities 83% 2 44 | Loans & Advan
Slide 10: Operating Expenses
OPERATING EXPENSES Mitigating external headwinds with internal optimisation COMMENTS Operating expenses grew by 2.61% to N11.39 billion. This was due to the impact of higher energy prices and inflation. Cost-to-income declined by 0.74% to 89.77% (H1’2016) compared to 90.44% (H1’2015), as the Ban
Slide 11: Profitability
PROFITABILITY COMMENTS In H1’2016, the Bank recorded the following; Profit before Tax (PBT) increased by 10.26% to N1.29 billion (H1’2016) from N1.17 billion (H1’2015). The increase resulted in growth from gross earnings, conscious cost management and improvement in fee based income. Profit afte
Slide 12: Deposits
DEPOSITS COMMENTS As at H1’2016, the Bank recorded the following; Deposits grew by 17.0% to N277.87 billion (H1’2016) from N237.43 billion (H1’2015). Growing retail franchise led to an increase in retail deposits from 19% (H1’2015) to 33% (H1’2016) and making up for lost public sector deposits (
Slide 13: Loan Growth and Analysis
LOAN GROWTH AND ANALYSIS BREAKDOWN OF LOANS AND ADVANCES Loan analysis H1’2016 SECTOR H1'2016 2015FY (N'bn) (N'bn) Oil & Gas 32.15 32.24 General 5.67 3.96 Hotel & Leisure 7.23 5.34 Personal and Professional 15.18 14.96 General Commerce 22.4 17.91 Construction 18.52 10.6 Real Estate Activities 17.16
Slide 14: NPL by Sectors
NPL by Sectors NPL (N’mn) Hotel, Leisure and Hospitality 1,060.10 21.79% Retail and Consumer Finance 1,729.63 35.54% Manufacturing 753.76 15.49% General Commerce 635.99 13.07% Power and Energy 192.62 3.96% Oil and Gas 133.14 2.74% Others 360.83 7.42% Total 4,866.07 100.00% COMMENTS Total NPL was N
Slide 15: Asset Quality
Asset Quality Efficient Risk Management culture evidenced by low NPL ratio COMMENTS Despite the challenging economic environment, the Bank recorded the following; NPL ratio at 2.83% remains below the regulatory limit (5%) and industry average (10%; Q1’2016). Liquidity ratio is above the regulato
Slide 16: Capital and Liquidity
CAPITAL AND LIQUIDITY COMMENTS As at H1’2016, the Bank recorded the following; CAR was above the regulatory limit of 10% despite the introduction of regulatory changes. Liquidity ratio was above the regulatory limit of 30%. We note that the Bank’s CAR which was reported as 15.10% (2015FY) declin
Slide 17: Managing Risk
Managing Risk Risk Management remains at the core of our business model Impact of decline in Government • Expected decline in industry loan quality amidst global low commodity Revenue on Credit Risk prices and with government as the major business driver. However, the Bank is poised to maintain high
Slide 18: Key Performance Metrics
KEY PERFORMANCE METRICS H1'2016 2015FY 2014FY 2013FY 2012FY 2011FY Net Interest Margin (%) 6.71 7.17 8.27 7.01 6.44 6.72 Cost of Funds (%) 6.56 5.65 5.21 5.87 5.42 3.07 Loan to Deposit Ratio (%) 63.02 65.59 57.65 47.02 42.31 40.81 Capital Adequacy Ratio (%) 13.36 15.09 18.22 27.00 -16.00 -13.50 Liqu
Slide 19: Section page
section page 1 Business and Operating Highlights 3 2 H1 Financial performance 8 3 Outlook & Strategy 19 19
Slide 20: H2'2016 Outlook
H2’2016 OUTLOOK • Uncertainty to characterize the global economy. • E.U and Britain try to find a common ground on the “Brexit” GLOBAL referendum. ECONOMY • China might post GDP numbers lower than 6.7%. • Oil prices to remain volatile but low. • Uncertainty regarding the extent of budget implementat
Slide 21: Key Initiatives
KEY INITIATIVES E-BUSINESS BRANCH SOLUTION EXPANSION digital strategies its optimization will continue to be will be pursued. leveraged upon. The Bank will continue to focus and grow the retail and commercial segment of its business. COST SERVICE OPTIMIZATION DELIVERY alongside remains at the fore c
Slide 22: Guidance
GUIDANCE Headlines 2015FY 2016E Comments Customer Deposit 10% 7-10% Deposit growth expected to remain Growth double digits; largely from a realignment of volumes from institutional to retail and commercial sources. Retail penetration – 14% 15-20% Improved retail volumes from campus (Personal account
Slide 23: Thank You
Thank You 23 23
Slide 24: History
HISTORY | Fully repositioned... in pursuit of growth @ Nationalbank Listed on the Nigerian Stock Acquired National Exchange(NSe) bani of Nigeria Ic. 0 >= weap Embarks on restructuring with project "LEAP" effectively transforming and repositioning the bank for growth and performance © pa WEMA BANK We
Slide 25: Board of Directors
BOARD OF DIRECTORS • Two Independent Directors • Varied experience from Banking, Industry, Law and other relevant sectors • Implementing strong governance and risk controls 25 25
Slide 26: New Branch Developments
NEW BRANCH DEVELOPMENTS Aminu Kano, Abuja Lekki-Ajah, Lagos Trans-Amadi, Rivers Awolowo, Lagos Ifo, Ogun Ado-Badore, Lagos Admiralty, Lekki, Lagos 26 26
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