First Holdco Plc · NSENG:FIRSTHOLDCO
First Holdco — FBN Holdings — FY2020 Earnings Presentation
33 slides from First Holdco's earnings presentation, Apr 8, 2021
Slide 1: FY 2020 Results Presentation
FY 2020 Results Presentation 8 April 2021
Slide 2: Disclaimer
Disclaimer This presentation is based on FBN Holdings Plc’s (‘FBNH’ or ‘FBNHoldings’ or the ‘Group’) unaudited financial statements for the year ended 31 December 2020. The Group’s Financial statements represent FBN Holdings Plc and its subsidiaries. FBNHoldings has obtained some information from so
Slide 3: Key Highlights Financial Performance Sustainability Priorities
Key Highlights 04 Financial Performance 10 Sustainability Priorities 21 Outlook 23 Appendix 25
Slide 4: Key Highlights
FBNHoldings Key Highlights
Slide 5: Resilient performance despite very challenging operating environment
Key Highlights Resilient performance despite very challenging operating environment Increase in profit before tax resulting from continuous revenue diversification with increase in non-interest income Well diversified and solid funding base enhancing strong liquidity management and business support
Slide 6: Sustained improvement in profitability while strengthening the balance sheet
Key Highlights Sustained improvement in profitability while strengthening the balance sheet Gross Earnings ₦’bn Net-Interest Income ₦’bn Non-Interest Income ₦’bn Operating Income ₦’bn Impairment Charge ₦’bn Operating Expense ₦’bn -1.9% -10.0% +26.7% +2.1% -1.0% +0.5% 279.6 51.1 50.6 590.4 251.6 174.
Slide 7: Enhanced asset quality and capital position
Key Highlights Enhanced asset quality and capital position Post Tax ROaE (%) Net Interest Margin (%) Cost of Funds (%) NPL Ratio % NPL Coverage (%) 12.4 12.6 3.1 7.4 9.9 47.5 48.0 2.3 7.7 6.1 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 Post Tax ROaA (%) Cost to Income (%) Cost of Risk (%) Capi
Slide 8: Steady progress over the last strategic cycle
Key Highlights Steady progress over the last strategic cycle Post Tax ROaE Non-interest revenue to operating income Cost of Funds 12.4% 12.6% 41.0% 3.4% 3.4% 3.1% 9.7% 35.2% 2.8% 31.6% 33.0% 2.3% 7.3% 25.6% 3.0% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Cost of Risk
Slide 9: Driving sustained growth and profitability through customer led innovation
Key Highlights Driving sustained growth and profitability through customer led innovation and disciplined execution in an increasingly digital world Improved Risk Management Innovation and Digital Focus ➢ Declining NPL ratio further to 7.7% with vintage NPLs ➢ Launched the FirstBank Virtual Payment
Slide 10: Financial Review
FBNHoldings Financial Review
Slide 11: Improving cost of funds supports net interest margin in a declining yield environment
Financial Review Improving cost of funds supports net interest margin in a declining yield environment Gross Earnings ₦’bn Gross Earnings Mix Interest Income Mix • Gross earnings declined by 1.9% to ₦579.4bn reflecting the low interest rate environment, 23.4% 31.0% 30.2% 37.8% notably in investment
Slide 12: Robust non-interest income supported by improving fees and commission
Financial Review Robust non-interest income supported by improving fees and commission • Non-interest income grew by 26.7% to ₦174.7bn Non-interest Breakdown Net (₦’bn) Fees & Commission Breakdown Gross (₦’bn) supported by increased trade related transactions and trading income from investment secur
Slide 13: Controlled opex growth despite high inflationary environment and currency devaluation
Financial Review Controlled opex growth despite high inflationary environment and currency devaluation OPEX Drivers (₦’bn) • Operating expenses largely held down despite the double-digit inflationary environment and currency devaluation • Marginal increase (+0.5%) in OPEX was driven by staff cost, r
Slide 14: Enhancing our digital offering to meet the needs of our customers
Financial Review Enhancing our digital offering to meet the needs of our customers >15million – digital customers at the end of 2020 23% - Increase in Enhanced the Firstmonie Introduced ‘large sum bulk Expanded our reach Firstmobile users in wallet with additional withdrawal’ feature on beyond Niger
Slide 15: Monetising our leadership position in digital solutions
Financial Review Monetising our leadership position in digital solutions Mobile Banking Transaction Volume Electronic Banking Revenue ₦’bn USSD Transaction Volume (Million) (Million) • Electronic banking revenue was up 1.3% notwithstanding a c50% reduction in fees on +28.1% +43.4% +1.3% the back of
Slide 16: Unparalleled leadership in Agent banking supports shift in customer behaviour
Financial Review Unparalleled leadership in Agent banking supports shift in customer behaviour and financial inclusion Agent Transaction Value ₦ trillion(2) • Agent Banking scheme continues to grow with agent base of ~100k across 772 local government areas; the most widespread network in Nigeria • C
Slide 17: Solid retail franchise supports robust liquidity
Financial Review Solid retail franchise supports robust liquidity Customer Deposits Mix (₦’bn) • Customer deposits grew 21.8% to ₦4.9 trillion (Dec 2019: ₦4.0 trillion) 4,895 2020 1,791 1,507 939 645 13 • Impressive growth in customers’ deposit demonstrates the significant strength of our brand whic
Slide 18: Increasing diversified loan book provides a resilient and sustainable revenue base
Financial Review Increasing diversified loan book provides a resilient and sustainable revenue base First Bank of Nigeria Gross Loan per Sector • Net customer loans grew by 19.7% to ₦2.3 trillion supported by trade finance activities and advances to the manufacturing, power, oil & gas(3), general co
Slide 19: Improving asset quality further strengthens the balance sheet
Financial Review Improving asset quality further strengthens the balance sheet First Bank of Nigeria NPL per Sector NPL Ratio 14.2% Agriculture 9.9% 2020 16.9% 9.2% 8.8% 8.8% 14.5% 18.0% General Commerce 7.7% General 2019 3.4% 8.1% 4.7% Oil & Gas upstream Real Estate 4.4% 5.3% Oil & Gas services 7.7
Slide 20: Business entities increasingly well capitalised
Financial Review Business entities increasingly well capitalised FirstBank Nigeria CAR (%) • Cleaner balance sheet and resilient earnings generative capacity provide a solid platform for sustainable capital accretion 17.0 • Sufficient capital buffers in place to support the 15.5 business in the curr
Slide 21: Sustainability Priorities
FBNHoldings Sustainability Priorities
Slide 22: Unwavering commitment to corporate responsibility and sustainability
Sustainability Priorities Unwavering commitment to corporate responsibility and sustainability Our Priorities Driving sustainable finance Empowering Supporting Contributing to and investments people our communities Environmental Sustainability Screened more than ₦4 Diversity & Financial Inclusion: P
Slide 23: Outlook
FBNHoldings SY Outlook
Slide 24: 2021 strategic imperatives
Outlook 2021 strategic imperatives Revenue Generation Technology-led Innovation & Digitization Enhancement Operational Efficiency • Accelerate customer-led innovation to • Leverage strategic partnerships to • Leverage in-house competencies enhance non-funded revenue increase speed-to-market to stren
Slide 25: Appendix
FBNHoldings SY Appendix
Slide 26: Commercial Banking Group
Appendix Commercial Banking Group Positioned for sustainable profitable growth • Resilient performance with profit before tax Key financial highlights & performance ratios growth of 4.0% underpinned by non-interest Income statement Statement of Financial Position income growth and marginal growth in
Slide 27: Merchant Banking and Asset Management Group (FBNQuest)
Appendix Merchant Banking and Asset Management Group (FBNQuest) Reaping the benefits of a diversified earnings platform Key Financial Highlights & Performance Ratios • Strong improvement in performance with a 60.9% y-o-y growth in profitability, driven particularly by Income statement Statement of F
Slide 28: First Mobile
Appendix Non-financial highlights FY 2020 Employees 4,213,738 POS 15,623 735 First Mobile 11,240,891 8,327 Automated AT M c a rd s 61% 39% 30 m i l l i o n 11.2 Teller Machines 3,111 Male Female Customers million
Slide 29: Operating environment remained challenging
Appendix Operating environment remained challenging A welcome exit from recession Stable foreign reserves amidst declining oil production 1.8 1.7 15.75 1.9 1.9 1.9 1.9 13.71 1.4 11.4 12.0 12.26 12.56 11.3 11.2 11.2 45.07 1.5 1.5 43.12 44.42 41.85 2.38 2.01 1.94 2.28 2.55 1.87 38.59 36.20 35.70 35.40
Slide 30: Key regulatory and policy interventions
Appendix Key regulatory and policy interventions The Monetary Policy The CBN grants Deposit Money Banks leave to The National Assembly approved The CBN introduced receipt of Committee increased the consider restructuring of tenor and loan terms for the revised 2020 budget. The CBN introduced Special
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
Appendix Contact details Head, Investor Relations Tolu Oluwole Tolulope.O.Oluwole@fbnholdings.com +234 (1) 905 2720 Investor Relations Team investor.relations@fbnholdings.com : +234 (1) 905 1086; 1147