First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2019 and Q1 2020 Earnings Presentation
33 slides from First Holdco's earnings presentation, 2020
Slide 1: Forging Ahead
FORGING AHEAD Investor & Analyst Presentation For the full year ended 31 December 2019 & first quarter ended 31 March 2020
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) audited financial statements for the twelve months ended 31 December 2019 and the unaudited accounts for the three months ended 31 March 2020. The Group’s Financial statements represent FBN Holdings
Slide 3: Agenda
Agenda 4 2017 – 2019 SPP Overview 11 FY 2019 & Q1 2020 Performance 23 Outlook 25 Appendix
Slide 4: 2017-2019 SPP Overview
FBNHoldings 2017 — 2019 SPP Overview
Slide 5: Regulatory and macro developments over the last three years
2017 - 2019 SPP Overview Regulatory and macro developments over the course of the last three years 2017 2018 2019 ✓ Fragile recovery from an economic ✓ CBN issued revised guidelines to ✓ CBN unveils 2019-2024 strategic focus recession commercial banks on internal capital and hints on banking sector
Slide 6: 2017-2019 Business plan achievements
2017 - 2019 SPP Overview 2017 – 2019 Business plan achievements: Repositioned the Group for enhanced shareholder value Enhanced Revenue Generation Improved Asset Quality & Strengthened Balance Sheet & Capabilities Revamped Risk Culture Improved Operational Efficiency ✓ Ramped up revenue from digital
Slide 7: Robust top-line performance while optimising balance sheet
2017 - 2019 SPP Overview Robust top-line performance while optimising balance sheet in a challenging operating environment Growth, y-o-y Income Statement Snapshot Statement of Financial Position Gross Earnings Operating Income Total Assets ₦627.0 billion 6.7% ₦449.3 billion 7.7% ₦6,203.5 billion 11.
Slide 8: Strong performance in Q1 confirms successful turnaround
2017 - 2019 SPP Overview Strong performance in Q1 confirms the successful turnaround of our business Growth, y-o-y Income Statement Snapshot Statement of Financial Position Gross Earnings Operating Income Total Assets ₦159.7 billion 14.5% ₦110.0 billion 12.2% ₦7,023.4 billion 13.2% Q1 19: ₦139.4 bil
Slide 9: Improvements in performance; key ratios
2017 - 2019 SPP Overview Improvements in performance; leveraging our strengths and investing for enhanced value creation over the longer-term Key Income Statement Ratios (%) Key Balance Sheet Ratios (%) Post Tax ROaE Post Tax ROaA Non-Performing Loans 15.3% 1.6% 24.7% 25.3% 12.4% 11.8% 1.3% 9.7% 1.1
Slide 10: COVID-19: Our response
2017 - 2019 SPP Overview COVID–19: Our response Business Focus and Community Support Customers Support Investor Engagement Employee Protection ✓ Provided an educational ✓ Implemented CBN forbearances ✓ A robust Business Continuity Plan ✓ Sustained engagement with intervention scheme for 1 to restruc
Slide 11: FY 2019 & Q1 2020 Performance
02 FY 2019 & Q1 2020 Performance
Slide 12: Consistent upward trajectory in non-interest income supports revenue growth
Consistent upward trajectory in non-interest income supports total revenue growth • 2019 Gross earnings up 6.7% y-o-y, on the back of growth in non-interest GROSS EARNINGS BREAKDOWN GROSS EARNINGS BREAKDOWN income, as we successfully (FY 2018: ₦587.4bn; FY 2019: ₦627.0bn) (Q1 2019: ₦139.4bn; Q1 2020
Slide 13: Resilient and consistent non interest income growth
Resilient and consistent non interest income growth • Non interest income NON-INTEREST INCOME BREAKDOWN (NET) sustained strong growth; (FY 2018: ₦132.0bn; FY 2019: ₦159.2bn; Q1 2019: ₦26.3bn; Q1 2020: ₦49.7bn) grew 20.6% y-o-y as at FY 2019 and 89% in Q1 2020 23.2% 26.4% 26.7% 31.7% • E-Banking and
Slide 14: OpEx elevated due to strategic investments and one-time charges
FY 2019 Performance • Notable investments made OpEx elevated due to strategic investments and one-time charges aimed at improving in security and e-business solutions (revenue operational efficiencies and revenue capabilities accretive), enterprise architecture (business MAIN OPEX DRIVERS stability
Slide 15: Undisputed leader in digital solutions
FY 2019 Performance Undisputed leader in digital solutions with continuous growth and demonstrated track record of monetising same • Successfully monetised GROWING REVENUE FROM DIGITAL USSD BANKING SCHEME MOBILE BANKING SCHEME digital banking with BANKING CHANNELS (₦’ MILLION) TRANSACTION VALUE (₦’
Slide 16: Agent Banking strength and reach
FY 2019 Performance Our Agent Banking strength/reach is unparalleled in the industry leading to increasing customers’ adoptions of our digital banking offerings • >12 million active customers on our digital 53k+ (1) AGENTS TRANSACTION VOLUME (‘Million)3 platforms (2018: Agents 9.8million) - FirstMob
Slide 17: Strong retail franchise provides diversified funding base
FY 2019 Performance Strong retail franchise provides the platform for a diversified and stable funding base • Strong funding base; FUNDING BY TYPE | FBNHOLDINGS DEPOSITS BY TYPE | FBNHOLDINGS (FY 2018: ₦5.6tr; FY 2019: ₦6.2tr; Q1 2020: ₦7.0tr) (FY 2018: ₦3.5tr; FY 2019: ₦4.0tr; Q1 2020: ₦4.3tr) cust
Slide 18: Diversified portfolio provides a resilient revenue base
FY 2019 Performance Diversified portfolio provides a resilient revenue base • Focus on quality risk FIRSTBANK (NIGERIA) GROSS LOANS BY SECTOR (FY 2018: ₦1,728.9bn; FY 2019: ₦1,619bn; Q1 2020: ₦1,808bn) asset creation to maintain a healthy balance sheet FY 18 24.2% 14.1% 9.9% 10.0% 7.1% 2.4% 7.0% 5.5
Slide 19: Significant improvement in asset quality
FY 2019 Performance Significant improvement in asset quality • Risk portfolio clean-up NPL RATIO COST OF RISK NPL COVERAGE accomplished; focus is on further improving current metrics 3.8% • Significant reduction in 24.7% NPL ratio to single digit, 80.3% 2.5% 9.9% and 9.2% in FY 1.9% 2019 and Q1 2020
Slide 20: Rebalanced portfolio aimed at minimising vulnerability
FY 2019 Performance Rebalanced portfolio aimed at minimising vulnerability • Retooled risk LOANS AND ADVANCES BY MATURITY |FIRSTBANK (NIGERIA) (FY 2018: ₦1,728.9bn; FY 2019: ₦1,619bn; Q1 2020: ₦1,808bn) management practice provides greater security and reduces risk 47.5% 47.6% 48.2% • Increased loan
Slide 21: Capital Adequacy Ratios remain above regulatory thresholds
FY 2019 Performance Capital Adequacy Ratios remain above regulatory thresholds • Substantial resolution of TOTAL RWA (₦'bn)| FIRSTBANK (NIGERIA) CAR| FIRSTBANK (NIGERIA) the non-performing loans TIER 1 CAPITAL AND CAR| FIRSTBANK (NIGERIA) 3,50 0 positions the Group for accelerated growth in 3,00 0 p
Slide 22: Strengthening the business model to recapture market leadership
FY 2019 Performance Strengthening the business model to recapture market leadership • Addressed legacy asset quality issues to provide platform for growth • Enhanced risk framework and imbedded increased accountability • Enhanced revenue generation capabilities throughout the Group • Improved revenu
Slide 23: Outlook
FBNHoldings
Slide 24: Focus on accelerating profitability across business groups
Outlook Over the next three years the focus will be on accelerating profitability across our business groups Vision: To be the leading African financial services provider delivering innovative solutions Strategic Ambition: Maximise shareholder value through a diversified portfolio focused on putting
Slide 25: Appendix
FBNHoldings Appendix
Slide 26: Commercial Banking Group
Appendix COMMERCIAL BANKING GROUP Positioned for sustainable profitable growth • Higher top-line revenues KEY FINANCIAL HIGHLIGHTS with significantly lower impairment charges Income statement Statement of Financial Position translated to a strong 83.1% Nbn FY 18 FY 19 y-o-y Q1 19 Q1 20 y-o-y Nbn FY
Slide 27: Merchant Banking and Asset Management Group
Appendix MERCHANT BANKING AND ASSET MANAGEMENT GROUP Positive performance amidst macro-economic headwinds driven primarily by fixed income trading, asset • On a normalised basis, 2019 management, trustees and structured products businesses Operating Income & PBT was 2.3% and 4.1% higher than KEY FIN
Slide 28: Insurance Group
Appendix INSURANCE GROUP Positioned for the next phase business growth with a robust balance sheet and enhanced digital capabilities • Increase in operating KEY FINANCIAL HIGHLIGHTS income above opex led Income statement Statement of Financial Position to a 29.1% growth y-o-y on pre-tax profits Nmn
Slide 29: Nigeria's operating environment remained challenging
Appendix Nigeria’s operating environment remained challenging GROSS DOMESTIC PRODUCT RATE TAPERS AMIDST RISING INFLATION CRUDE OIL PRODUCTION CAPACITY INCREASES AS RESERVE POSITION SLOWS DOWN 1.7 1.7 1.8 1.7 1.9 1.9 1.9 1.8 1.8 1.9 15.4 13.3 47.79 12.0 12.26 46.21 44.31 43.12 44.42 45.07 11.2 11.3 1
Slide 30: Key regulatory interventions and policies
Appendix Key regulatory interventions and policies further impacted market sentiment CBN issues guidelines on CBN establishes the Shared CBN further reviews the Loan to CBN issues Consumer Protection The CBN grants Deposit Money managing credit Agent Network Expansion Deposit ratio upwards to 65% fr
Slide 31: Global Footprint
Appendix Global Footprint Nigeria France UK Ghana Guinea Senegal Name Name Name Name Name Name FBN Holdings Plc. FBNBank UK Ltd. FBNBank UK Ltd. FBNBank Ghana FBNBank Guinea FBNBank Senegal Type Type Type Type Type Type Licensed financial holding Bank branch Licensed bank Licensed Bank Licensed Bank
Slide 32: Definitions
Appendix Definitions ₋ Cost-to-income ratio computed as operating expenses divided by operating income ₋ Cost of risk computed as annualised credit impairment charges divided by the average opening and closing gross loans balances ₋ Net-interest margin computed as annualised net interest income divi
Slide 33: Contact Details
Contact Details Head, Investor Relations Tolulope Oluwole : Tolulope.O.Oluwole@fbnholdings.com : +234 (1) 905 2720 Investor Relations Team : investor.relations@fbnholdings.com : +234 (1) 9051086
FBN Holdings — FY2019 and Q1 2020 Earnings Presentation on 6ix