Fidelity Bank Plc · NSENG:FIDELITYBK
Fidelity Bank — H1 2015 Earnings Presentation
34 slides from Fidelity Bank's earnings presentation, Jul 27, 2015
Slide 1: Fidelity Bank Investor Presentation
Fidelity Bank Investor Presentation Unaudited Financial Results for the 6 months ended June 30, 2015 12KLD0346_Client template1 27/07/2015 12:26:18
Slide 2: Outline
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance 12KLD0346_Client template1 27/07/2015 12:26:20
Slide 3: The Operating Environment - Key Highlights
The Operating Environment - Key Highlights GDP growth rate slows down to 3.86% due to the significant decline in government revenues driven by lower oil prices. Central Bank of Nigeria (CBN) restricts access to the official foreign exchange market for selected items to boost local production and
Slide 4: Outline
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance 12KLD0346_Client template1 27/07/2015 12:26:20
Slide 5: Overview of Fidelity Bank
Overview of Fidelity Bank Background Key Highlights A full service bank with International Authorisation established in 1987 and licensed by the Central Bank of Nigeria Total Assets N1,192.7 billion The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and co
Slide 6: Outline
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance 12KLD0346_Client template1 27/07/2015 12:26:20
Slide 7: Performance Highlight
Performance Highlight Gross Earnings up by 13.6% to N71.9 billion in H1 2015 (H1 2014: N63,3 billion) Revenue Net Fee Income up by 25.9% to N15.2 billion in H1 2015 (H1 2014: N12.1 billion) and Net Interest Margin at 6.6% in H1 2015 (Q1 2015: 6.2%; 2014FY: 6.0%) Efficiency Ratio PBT increase
Slide 8: Financial Highlights
Financial Highlights Summary of Income Statement – H1 2015 Vs H1 2014 N’million H1 2015 H1 2014 VAR % VAR Gross Earnings 71,890 63,258 8,632 13.6% Interest Income Loans 37,967 33,487 4,480 13.4% Interest Income Liquid Assets 18,060 18,041 19 0.1% Total Interest Income 56,027 51,528 4,499 8.7% Intere
Slide 9: Financial Highlights
Financial Highlights Summary of Income Statement – Q2 2015 Vs Q1 2015 N’million Q2 2015 Q1 2015 VAR % VAR Gross Earnings 37,061 34,829 2,232 6.4% Interest Income Loans 19,396 18,570 826 4.4% Interest Income Liquid Assets 9,512 8,548 964 11.3% Total Interest Income 28,908 27,118 1,790 6.6% Interest E
Slide 10: Financial Highlights
Financial Highlights Statement of Financial Position: Q2 2015 Vs Q1 2015 Vs 2014 FY N’million Q2 2015 Q1 2015 2014 FY VAR % VAR Total Assets 1,192,684 1,196,228 1,187,025 5,659 0.5% Earning Assets 825,327 804,752 818,993 6,334 0.8% Bank Placements 4,000 2,000 42,049 (38,049) -90.5% Treasury Bills 19
Slide 11: Financial Highlights
Financial Highlights Statement of Financial Position: H1 2015 Vs H1 2014 N’million H1 2015 H1 2014 VAR % VAR Total Assets 1,192,684 1,058,235 134,448 12.7% Earning Assets 825,327 718,383 106,944 14.9% Bank Placements 4,000 23,450 (19,450) -82.9% Treasury Bills 199,640 190,807 8,833 4.6% Bonds 48,848
Slide 12: Outline
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance 12KLD0346_Client template1 27/07/2015 12:26:20
Slide 13: Gross Earnings Analysis
Gross Earnings Analysis Key Highlight (N’million) H1 2015 H1 2014 2014 Avg. Gross Earnings : H1 2015 Gross Earnings: H1 2014 Gross Earnings 71,890 63,258 66,201 E-banking, 3% Others, 9% E-banking, 2% Others, 4% Interest Income Loans 37,967 33,487 35,491 COT, 3% COT, 2% Interest Income Liquid Assets
Slide 14: Earnings Analysis
Earnings Analysis Net interest income grew by 8.3% y-o-y due to the 14.9% growth in the volume of earning assets and a Net Interest Income ( y-o-y) reduction in average funding costs N 'billion 26.8 Net interest income grew by 16.7% q-o-q on the back 24.8 of the improvement in Yields on Earning
Slide 15: E-Banking Income Analysis
E-Banking Income Analysis Disciplined execution of our retail strategy (despite Quarterly Revenue Trend pressure on consumers disposable income) continues N ’million to drive cross-selling of e-banking products and increased customer migration. 1,155 Debit card transactions and internet banking
Slide 16: Expense Analysis
Expense Analysis Key Highlight (N’m) H1 2015 H1 2014 2014 Avg Operating Exp: H1 2015 Operating Exp: H1 2014 Total Expenses 28,821 25,329 27,542 Others Exp., Staff 12,740 11,944 12,937 28% Others Exp., 26% Depreciation 1,923 1,904 1,866 Regulatory Cost 4,782 3,887 4,634 Staff Cost, Staff Cost, Techno
Slide 17: Cost Dynamics
Cost Dynamics Cost to income ratio improved y-o-y to 69.2% (H12015) Operating Expenses & Staff Cost from 71.2% (H1 2014) and q-o-q to 67.9% (Q2) from N 'billion % Share 70.7% (Q1) 30 28.8 100% 25.3 Some strategic initiatives planned for H2, 2015 are likely 26 75% to increase our cost base, howev
Slide 18: Funding Structure
Funding Structure Key Highlights (N’m) H1 2015 2014 FY Funding Structure: H1 2015 Funding Structure: 2014 FY Demand Deposits 389,250 424,397 Equity, 16% Equity, 16% Savings Deposits 105,214 97,996 Debt Demand, Eurobond, Demand, Time Deposits 302,086 297,641 Securities, 8% 35% 5% 38% Borrowings, Borr
Slide 19: Deposit Analysis
Deposit Analysis Total deposits declined marginally by 0.1% q-o-q while Customer Deposits demand deposit declined by 9.4% q-o-q as higher N 'billion deposit rates, inflation and devaluation fears increased the migration of customers to tenor deposits. 820.0 797.5 796.6 CRR harmonization increase
Slide 20: Retail Deposit Analysis (Personal Banking)
Retail Deposit Analysis (Personal Banking) Savings deposit grew by 7.4% YTD but declined Savings Deposits Trend marginally by 0.3% q-o-q, reflecting increased pressure N 'billion on consumers disposable income 105.6 105.2 98.0 Retail deposit growth was flat in Q2 as Public Sector 86.3 82.3 salar
Slide 21: Sound Liquidity Position
Sound Liquidity Position Liquidity Ratio remains flat q-o-q despite the depletion Liquidity Ratio of liquid assets by N21bn due to the CRR harmonisation 38.0% 32.6% 32.2% Liquid assets skewed towards short-term high yielding 30.0% 30.0% 30.0% instruments due to the current tight monetary policy
Slide 22: Portfolio Analysis
Portfolio Analysis Breakdown of Loans & Advances: Q2 2015 Vs Q1 2015 Vs 2014 FY N’million Q2 2015 Q1 2015 2014 FY VAR % VAR Communication 72,887 73,200 76,480 (3,593) -4.7% Oil and gas 150,527 144,147 134,750 15,777 11.7% Power 59,223 59,641 57,626 1,597 2.8% Manufacturing 60,537 51,778 51,323 9,214
Slide 23: Portfolio Analysis
Portfolio Analysis Breakdown of Loans & Advances Portfolio Analysis – Q2 2015 Others, 9.1% N’million Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Real Estate, 2.8% Communication, 12.3% Communication 72,887 73,200 76,480 86,204 87,229 Agriculture, 1.9% Oil and gas 150,527 144,147 134,750 122,410 72,451 Co
Slide 24: Loan Book Analysis
Loan Book Analysis Total loans grew by 5.8% YTD and 4.7% q-o-q, Net Loans and Advances to Customers however actual loan growth is 3.2% after adjusting N 'billion for currency devaluation driven growth of 2.6%. 572.8 Major sectors driving organic loan growth include 546.9 Manufacturing, Consumer
Slide 25: Portfolio Analysis
Portfolio Analysis Breakdown of Non-performing Loans: H1 2015 Vs 2014 FY (Naira in million) H1 2015 2014 FY N’million % Contr. % NPL N’million % Contr. % NPL Communication 3,405 15.7% 4.7% 3,628 14.9% 4.7% Oil and gas 1,022 4.7% 0.7% 605 2.5% 0.4% Power 0 0.0% 0.0% 0 0.0% 0.0% Manufacturing 7,177 33
Slide 26: Portfolio Analysis
Portfolio Analysis Breakdown of Non-performing Loans NPL Analysis – Q2 2015 Real Estate, Agriculture, 1.6% Others, 9.9% N’million Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 3.0% Construction, Communication, Communication 3,405 3,431 3,628 4,458 3,089 0.6% 15.7% Govt., 0.5% Oil and gas, Oil and gas 1,02
Slide 27: NPL Analysis
NPL Analysis The growth in the loan book and recoveries resulted Gross Loans & Advances in lower NPL of 3.7% compared to 4.4% recorded in N 'billion 2014 FY. 593.4 Though absolute NPLs declined in some sectors, 564.7 559.1 additional classifications were made in General Commerce, Oil & Gas, and
Slide 28: Capital Adequacy
Capital Adequacy Fidelity remains well capitalized with strong Capital Capital Adequacy Ratio Adequacy Ratio (CAR) of 22.7% compared to the N 'billion % Ratio regulatory minimum requirement of 15.0%. 173.1 178.1 178.6 180 40% We concluded the issuance of our 7 year 30% 120 subordinated bond in Q
Slide 29: Business Segment Analysis
Business Segment Analysis Business Description Revenue Deposits Loans Handles the bank’s institutional clients with turnover in excess of ₦10.0bn. Corporate & Investment Key focus sectors include: 39.8% 17.6% Oil & gas upstream Oil & gas downstream 72.4% Banking Power & infrastructure Te
Slide 30: Update on Our Retiring Directors
Update on Our Retiring Directors Three of our Executive Directors – IK Mbagwu, Executive Director, Lagos & West Directorate, Onome Olaolu, Executive Director, Risk Management and John Obi Executive Director, Corporate Banking are retiring from the Board after they attained the bank’s retirement ag
Slide 31: Profile of Our Retiring Directors
Profile of Our Retiring Directors Mr. IK Mbagwu rejoined Fidelity Bank as the Executive Director Operations, Technology & Shared Services in 2006. IK started his career as a Tax Senior in Arthur Andersen, moved on to Nigerian American Bank Limited (Bank Of Boston) before joining the then Fidelity
Slide 32: Outline
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance 12KLD0346_Client template1 27/07/2015 12:26:20
Slide 33: Growth Expectations
Growth Expectations GROWTH EXPECTATIONS ON KEY INDICATORS S/N INDEX 2014 Actual 6M 2015 Actual 2015 TARGET COMMENT 1 Net Interest Margin 6.0% 6.6% 7% On Track 2 Tax Rate 11.1% 15% 10% to 15% On Track 3 Loan Growth 27.1% 5.8% 10% On Track 4 Deposit Growth 1.7% -2.9% 10% Behind Target 5 Cost - Income
Slide 34: Thank You
MP rrvenrry Thank You