Wema Bank PLC · NSENG:WEMABANK
Wema Bank — FY2017 Earnings Presentation
31 slides from Wema Bank's earnings presentation, March 2018
Slide 1: Presentation to Analysts & Investors: 2017 Full Year Results
PRESENTATION TO ANALYSTS & INVESTORS 2017 Full Year Results
Slide 2: Business & Operating Highlights
Business & Operating Highlights 1 Overview of the Bank 03 Review of Operating Environment 04 Policy Highlights 05 Recap of 2017 Commitments 06 ALAT – Full Digital Bank 07 Digital Performance – Alternate Platforms 08 Non-Financial Highlights 09 2017 FULL YEAR RESULTS 2
Slide 3: Overview of the Bank
Overview of the Bank Credit Digital BBB- (SHORT TERM RATING) BBB- (NATIONAL LONG TERM RATING) Ratings A3 (LONG TERM RATING) F3 (LONG TERM RATING) Banking Pioneer bank in Africa to offer a full Earnings N65.27bn digital banking experience 20.07% Alternate Customer Base 1.87mn Banking Channels 296 4,9
Slide 4: Review of Operating Environment
Review of Operating Environment Global Environment 3mth Avg. Brent Crude Data • Global economy recorded further improvement despite concerns about protectionism and geo-political fallouts. • The E.U and U.K continued discussions towards the agreement of terms (transitional period) after invoking Art
Slide 5: Policy Highlights
Policy Highlights The CBN reviews upward, foreign borrowing limit by banks from First MPC meeting for the year held. Key decision 75% to 125% of shareholders’ fund. Net Open Position (NOP) is rates left unchanged. Jan also increased from 5% to 10%, arising from the devaluation of the Naira Feb CBN c
Slide 6: Recap of 2017 Commitments
Recap of 2017 Commitments Status Priorities • Grow deposit volume through Retail and Digital Partnerships. o Additional 400,372 retail accounts opened in 2017; an increase of 103.51%. o Deposit volumes declined by 10.18% to N254.46billion (2016; N283.30 billion) due to the high yield environment and
Slide 7: ALAT – Full Digital Bank
ALAT – Full Digital Bank ALAT has Revolutionized the Banking Space; Close to a Thousand Accounts Opened Daily. 178,574 853,007 13,644 Accounts opened transactions executed savings goals created. totaling N12bn 0 1 1 0 0 1 1 0 1 0 0 1 1 0 0 1 NNN 0 1 1 1 0 1 1 1 1 1 0 0 1 1 0 0 1 0 1 0 1 0 1 0 0 0 1
Slide 8: Alternate Platforms
Alternate Platforms Delivering Value through Simple, Convenient & Reliable Platforms. Internet Platform1 Mobile Platform 2 1000% 500% 800% 400% 600% 300% 400% 200% 200% 100% 0% 0% 2014 2015 2016 2017 2014 2015 2016 2017 Subscribers Transaction value Transaction Count Value Transaction Count Subscrib
Slide 9: Non-Financial Highlights
Non-Financial Highlights Campus Storms Awards The Bank has been involved in over 10 University Campus storms, as we continue onboarding the younger generation The Launching of ALAT the First Digital Banking in Nigeria – ALAT by Wema. Capital Reorganization Negative retained earnings resolved having
Slide 10: Financial Performance
Financial Performance 2 2017 Full Year Financial Highlights 11 2017 Full Year Profit Before Tax 12 Earnings Trend 13 Efficiency 14 Efficiency & Margin Analysis Cont’d 15 Deposits 16 Loan Portfolio and Analysis 17 Asset Quality 18 Capital Ratio & Funding 19 Stable Performance 20 2017 FULL YEAR RESULT
Slide 11: FY2017 Financial Highlights
FY2017 Financial Highlights 2017FY 2016FY % 2017FY 2016FY % Gross Earnings N65.27bn N54.36bn +20.07 Deposits N254.46bn N283.33bn (10.19) (customer) PBT N3.01bn N3.25bn (7.38) Loans (net) N215.84bn N227.01bn (4.92) PAT N2.26bn N2.56bn (11.72) Interest Income N53.07bn N44.45bn +19.39 CAR 14.32% 11.07%
Slide 12: FY2017 Profit Before Tax
FY2017 Profit Before Tax Jaws Expands Reflective of the Growing Business FY2017 vs. FY2016 adverse | favourable N2.56bn PAT -11.91% N3.01bn PBT -7.27% N26.77bn Opex 7.99% N12.20bn Non Interest Income 24.44% 12.08% Jaws 3 N19.77bn Net Interest Income 5.99% N65.27bn Gross Revenue 20.07% Comments • Gro
Slide 13: Earnings Trend
Earnings Trend Increasing Brand Acceptance Supportive of Earnings Growth Gross Earnings Income Mix (FY2017) Income Mix (FY2016) 70 N'bn 65 60 Non interest 54 Non interest income 50 46 income 42 19% 18% 40 36 30 20 Interest income Interest income 10 81% 82% 0 2013 2014 2015 2016 2017 Interest Income
Slide 14: Efficiency
Efficiency Efficient Cost Management Despite Development of New Capabilities. Operating Expenses Drivers (N’bn) 30 N'bn 26.77 24.79 N27.16 23.41 2.23 22.10 (0.34) 0.95 25 N24.7 19.44 20 0.50 14.45 11.37 12.13 9.89 15 9.12 2.18 2.25 2.31 2.32 10 1.39 5 10.03 9.79 10.35 10.01 8.93 0 2013 2014 2015 201
Slide 15: Efficiency & Margin Analysis
Efficiency & Margin Analysis Yield on Assets Net Interest Margin 19% 17.76% 17% 15.65% 15% 14.25% 14.50% 13.62% 13% 11% 9% 7% 5% 2013 2014 2015 2016 2017 Comments ▪ The year was characterized by a high interest rate environment which resulted in the following; ➢ Yield on Assets increased to 17.76% (
Slide 16: Deposits
Deposits High Interest rate Environment Impact Deposit Growth Deposits (customer) Deposit Mix (FY2017) Deposit Mix (2016FY) 284.98 283.33 Domiciliary 300 Domiciliary N'bn 258.96 254.46 3% 3% 250 217.73 200 Savings Savings 150 20% 16% Term 100 48% Term 50% 50 Current Current 0 29% 31% 2013 2014 2015
Slide 17: Loan Portfolio and Analysis
Loan Portfolio and Analysis Breakdown of Loans and Advances Loan Analysis FY2017 FY2017 FY2016 5% SECTOR (N'bn) (N'bn) 7% 5% Power and Transportation Energy and Storage Professional, Scientific Agriculture, Forestry & Fishing 4.38 2.26 & Technical Services 4% Capital Market 2.43 5.12 Manufacturing C
Slide 18: Asset Quality
Asset Quality Low Non-Performing Loans and Adequate Coverage NPL 250 90.00% FY2017 FY2016 SECTOR % % 80.00% (N'bn) (N’bn) 200 70.00% General 3.11 40.18 3.72 31.93 Agriculture 1.45 18.73 0.05 0.43 60.00% 150 General Commerce 1.27 16.41 0.97 8.33 50.00% Manufacturing 0.51 6.59 0.76 6.52 N'bn 40.00% Fi
Slide 19: Capital Ratio & Funding
Capital Ratio & Funding Capital Adequacy Ratio (N’m) Funding Sources Sha reholders' Deposit (financial ins titutions) Total Regulatory Capital 25,032,755 fund 7% 13% Other l iabilities Total Risk Weighted Assets 174,776 5% Other borrowed Capital Adequacy Ratio 14.32% funds 10% The Bank is a commerci
Slide 20: Stable Performance
Stable Performance Gross Earnings Deposits (customer) 70 300 N'bn N'bn 60 250 50 200 40 150 30 100 20 10 50 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Total Assets Loans & advances (net) 250 450 N'bn N'bn 40 0 20 0 350 300 150 250 20 0 100 150 100 50 50 0 0 20 13 20 14 20 15 20 16 20 17 2
Slide 21: Outlook & Strategy
Outlook & Strategy 3 2018 Economic Outlook 22 Strategic Priorities 23 Guidance 24 Appendix 25 2017 FULL YEAR RESULTS 21
Slide 22: 2018 Economic Outlook
2018 Economic Outlook Global Economy Domestic Economy Domestic Market • Global economy to record continued • The economy to record continued • Foreign exchange liquidity to remain expansion. However, threats from expansion. However, the political stable. We believe the strategic building protectioni
Slide 23: The Bank is in the final stage of its three-pronged strategy
The Bank is in the final stage of it’s three-pronged strategy Overall Improving market share and efficiency by Aspiration leveraging digital capabilities Enhance Drive Grow market Transform Digitize Build a High Capital & profitable share in Retail Customer Business and Performing Funding growth in
Slide 24: Guidance
Guidance FY 2017 Actual 2017 Guidance 2018 Guidance Customer Deposit Growth (10.19%) 5% 15% Loan Growth (4.92%) 1.5% 10% Non-Interest Income Growth +24.39% 15% 25% Net Interest Margin 6.61% 6.5% - 7% 6.5% - 7% Cost to Income Ratio (%) 89.90% 80% 75% - 80% NPL 3.52% <5% <5% Return on Average Equity 4
Slide 25: Appendix
Appendix 2017 FULL YEAR RESULTS 25
Slide 26: History Timeline
History Timeline Fully Repositioned… in pursuit of growth 2017 FULL YEAR RESULTS 26
Slide 27: Statement Of Profit Or Loss And Other Comprehensive Income
Statement Of Profit Or Loss And Other Comprehensive Income In thousands of Nigerian Naira Group Group Bank Bank 31-Dec-17 31-Dec-16 31-Dec-17 31-Dec-16 Interest income 53,073,120 44,560,461 52,662,658 44,446,020 Interest expense (33,306,169) (25,910,283) (32,887,899) (25,765,627) Net interest income
Slide 28: Statement of Financial Position as at 31 December 2017
Statement of Financial Position as at 31 December,2017 Group Group Bank Bank 31-Dec 31-Dec 31-Dec 31-Dec 2017 2016 2017 2016 N'000 N'000 N'000 N'000 ASSETS Cash and cash equivalent 22,427,586 27,623,945 22,425,891 27,608,708 Restricted Deposit with CBN 26,495,664 48,161,682 26,495,664 48,161,682 Ple
Slide 29: The Board of Directors
The Board of Directors In the course of the year, the following changes were made to the Board • Mr. Babatunde Kasali (wef. May 2017) joined the Board as Chairman, replacing Mr. Adeyinka Asekun . • Ademola Adebise (wef. January 2017) was appointed Deputy Managing Director. 2017 FULL YEAR RESULTS 29
Slide 30: 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
Slide 31: Thank You
Thank You 2017 FULL YEAR RESULTS 31