First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2015 & Q1 2016 Earnings Presentation
33 slides from First Holdco's earnings presentation, 2016
Slide 1: Investors & Analysts Presentation: FY 2015 & Q1 2016
Full year ended 31 December 2015 & first quarter ended 31 March 2016 Investors & Analysts Presentation
Slide 2: Disclaimer
DISCLAIMER This presentation is based on FBN Holdings Plc‟s („FBNH‟ or „FBNHoldings‟ or the „Group‟) audited IFRS results for the twelve months ended 31 December, 2015 and the unaudited results for the three months ended 31 March, 2016. The Group's financial statements have been prepared using the a
Slide 3: Outline
Outline Operating Environment Pg 5 FBNHoldings at a Glance Pg 7 - 10 Financial Review Pg 12 – 22 Strategic Review Pg 24 – 30 Appendix Pg 33 3
Slide 4: Operating environment
FBNHoldings Operating environment
Slide 5: Operating & regulatory environment
Operating & regulatory environment OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX • Crude oil prices remained at depressed levels leading to a 7.5% y-o-y decline in domestic production as at December 2015 • External reserves declined 15.7% to $29.07bn in December 2
Slide 6: FBNHoldings at a glance
FBNHoldings FBNHoldings at a glance
Slide 7: Key highlights
Key highlights OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Total assets Customer deposits Loans & advances (net) Gross loans/deposits FY15:N4,166.2bn FY15:N2,970.9bn FY15:65.9% FY15:N1,817.3bn Q116:N4,142.6bn Q116:N2,835.3bn Q116:67.5% Q116:N1,762.2bn Gross earn
Slide 8: Global footprint: building a stronger, well-diversified financial services group
Global footprint: building a stronger, well-diversified financial services group OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Nigeria Ghana • Name FBN Holdings Plc. • Name FBNBank Ghana • Type Licensed financial holding company • Type Licensed Bank • Established
Slide 9: FBNHoldings – our main operating companies
FBNHoldings – our main operating companies OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX FBN Holdings Plc1 Investment Banking and Asset Commercial Management Merchant Banking & Insurance Insurance Banking Asset Mgmt.2 Provides Merchant Banking, Financial Advisory,
Slide 10: FBNHoldings' contribution by business groups
FBNHoldings‟ contribution by business groups OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Gross Earnings FY14 [N455.1bn] FY15 [N465.8bn] ∆ 2.3% Q115 [N117.2bn] Q116 [N100.2bn] ∆ -14.5% Profit Before Tax FY14 [N94.5bn] FY15 [N10.2bn] ∆ -89.2% Q115 [N26.1bn] Q116 [
Slide 11: Financial review
Financial review FBNHoldings 11
Slide 12: Income statement and balance sheet snapshots
Income statement and balance sheet snapshots OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Income statement Nbn FY 14 FY 15 y-o-y Q1 15 Q1 16 y-o-y Key ratios FY 14 FY 15 Q1 15 Q1 16 Gross earnings 481.8 505.2 4.9% 126.8 107.5 -15.2% Net interest margin1 7.6% 8.1%
Slide 13: Income statement evolution
Income statement evolution OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX FY 2015 (Nbn) 9.3% 10.5% 12.0% 2.1% 5.6% 18.0% 360.0% 100.0% 77.1% 36.6% 82.0% 396.2 131.2 99.4 364.4 223.6 140.8 119.3 0.0 21.5 6.4 15.1 1 Operating 1 2 Interest income Interest Non-interest
Slide 14: Balance sheet efficiency and capital evolution
Balance sheet efficiency and capital evolution OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Balance sheet efficiency Capital ratios – FirstBank (Nigeria) 1 Leverage (times) Gross loans to deposits Liquidity Total RWA (N'bn) Tier 1 capital ratio Total capital adeq
Slide 15: Breakdown of customer deposits
Breakdown of customer depositsst Bank of Nigeria Only) OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX 2 Deposits by type Nbn Deposits by SBU trend Nbn FirstBank (Nigeria) Current accounts Savings accounts Term deposits Domiciliary accounts Retail banking Private ba
Slide 16: Gross earnings and margin analysis
Gross earnings and margin analysis OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX 1 Gross earnings breakdown (Nbn) Net interest margin drivers Deposits cost Cost of funds Interest Income Non Interest Income Loan yield Asset yield Securities yield Net interest margi
Slide 17: Operating income vs. operating expenses
Operating income vs. operating expenses OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Operating income and expenses (Nbn) Operating income breakdown (Nbn) Net interest income Net fee & commission income Operating income Operating expenses Cost to Income Ratio Heal
Slide 18: Breakdown of loans and advances across the Group
Breakdown of loans and advances across the Group OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX FBNHoldings gross loans by business groups 1 FirstBank (Nigeria) & its Subsidiaries gross loans 2 Commercial Banking Merchant Banking & Asset Management FirstBank (Niger
Slide 19: FirstBank (Nigeria) & FBNBank UK - loans and advances by sector
FirstBank (Nigeria) & FBNBank UK - loans and advances by sector OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Q116 FirstBank (Nigeria) gross loans by sectors Manufacturing 11.5% [13.0%; 11.0%] ₋ Gross loans at the Group level declined 11.9% y-o-y (FY2015) 3.9% 1.7
Slide 20: Asset quality analysis (1)
Asset quality analysis (1) OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Loans and advances by maturity Loans and advances by type FirstBank (Nigeria) FirstBank (Nigeria) Overdrafts Term Loans Commercial loans 0 -30 days 1 - 3 months 3 - 6 months 6 - 12 months 1 -
Slide 21: Asset quality analysis (2)
Asset quality analysis (2) OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Asset quality trend FY15 NPL evolution FBNHoldings FirstBank (Nigeria) NPL N‟bn NPL coverage (including statutory credit reserve) Cost of risk NPL ratio 137.9% 127.0% N256.9bn N1.2bn N1.4bn N
Slide 22: Asset quality analysis (3)
Asset quality analysis (3) OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Oil & Gas NPLs NPLs by SBU Nbn FirstBank (Nigeria) FirstBank (Nigeria) Oil & Gas services Oil & Gas downstream Oil & Gas upstream Retail Banking Institutional Banking Corporate Banking Privat
Slide 23: Strategic review
Strategic review FBNHoldings 23
Slide 24: Group strategic framework
Group strategic framework OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX 1 2 3 STRATEGY Structural changes in the Improve cost and capital Enhance revenue growth risk-taking culture, processes efficiency and oversight • Customer selection • Increased control on pro
Slide 25: Risk management – what went wrong?
Risk management – what went wrong? OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX 1) Concentration risk 2) Knowledge gaps across the credit chain 3) Credit growth outstripped monitoring capacity 25
Slide 26: Overhauling our risk management approach from origination to recovery
Overhauling our risk management approach from origination to recovery OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Moderating the risk appetite Recovery Remediation Split recovery and Management & Ensure compliance remediation to drive Transaction to terms & more
Slide 27: Cost and capital efficiency
Cost and capital efficiency OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX – 4% y-o-y reduction in operating expenses targeted at Group level – The bulk of cost savings expected at FirstBank (Nigeria) where we see decline in advert & corporate promotions (~60%), do
Slide 28: Enhancing revenue growth
Enhancing revenue growth OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Net interest income Non-interest revenue ₋ Selective loan creation ₋ Increase transaction banking volumes ₋ Grow credit card usage ₋ Increase penetration of card users to generate non-interest
Slide 29: Leveraging our leading position and favourable dynamics in the digital space
Leveraging our leading position and favourable dynamics in the digital space OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Nigeria ranks 1st in Africa and 7th globally in terms of number of mobile phone subscriptions Nigeria ranks 1st in Africa and 8th globally in
Slide 30: Goal: to return value to shareholders
Goal: to return value to shareholders OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW APPENDIX Key measures FY2015 FY2015 Q12016 FY2016 (guidance) (actual) (actual) (guidance) Deposit growth 0% -2.6% -4.6% 5% - 10% Cost Efficiency Net loan growth -5% -16.6% -3.0% 3% - 5% Opt
Slide 31: Contact details
Contact details Head, Investor Relations Oluyemisi Lanre-Phillips Email: oluyemisi.lanre-phillips@fbnholdings.com Phone: +234 (1) 9052720 Investor Relations Team investor.relations@fbnholdings.com Phone: +234 (1) 9051146 +234 (1) 9051386 +234 (1) 9051086 31
Slide 32: Appendix
Appendix FBNHoldings 32
Slide 33: Definition of terms
Definition of terms OPERATING ENVIRONMENT FBNH AT A GLANCE FINANCIAL REVIEW STRATEGIC REVIEW 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
FBN Holdings — FY2015 & Q1 2016 Earnings Presentation on 6ix