Fidelity Bank Investor Presentation Unaudited Financial Results for the 9 months ended September 30, 2015 www.fidelitybank.ng
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance www.fidelitybank.ng 2
Recent Events & Policy Changes JP Morgan has excluded Nigeria from its local-currency emerging-market bond indexes, citing liquidity concerns due to restrictions on foreign exchange transactions. The partial removal cuts the weight of Nigerian Bonds to 0.79%, while that of Brazil and South Africa increased to 0.80% and 0.20% respectively. President Muhammadu Buhari backs the CBN foreign currency control measures targeted at protecting the value of the Naira. The CBN implements the Treasury Single Accounts (TSA) on Sept. 15 th , 2015. The MPC reduces banks Cash Reserve Requirements (CRR) to 25%, freeing up some liquidity in the banking sector post TSA implementation. Nigerian Electricity Regulatory Commission (NERC) set to increase electricity tariff as DISCOs and GENCOs lament over high operating cost. Foreign reserves stands at $30.2bn though import cover remains below 6 months. Inflation is currently at 9.4%; above the targeted band of 6% – 9%. www.fidelitybank.ng 3
Economic Stimulus to Drive Growth Senate confirms all 36 ministerial nominees, bringing an end to over 3 weeks of ministerial screening. With the Senate confirmation concluded, the President can now constitute a cabinet to chat the way forward for the economy. The Presidency plans setting up $25 billion infrastructure fund to stimulate the economy with investments targeted at key sectors including transport and power The Debt Management Office in September restructured an estimated N322bn of 13 state government loans by issuing 2034 FGN bonds to commercial banks, effectively removing the loans from the balance sheet of banks (de-risking the banking industry). The CBN has started the disbursement of concessionary loans to state governments for the liquidation of workers salary arrears; a total of N338bn is estimated to have been disbursed to 27 states. The concessionary loans was issued at an interest rate of 9% with a tenor of 20 years. State workers start receiving backlog of owed salaries after the Federal Government begins the implementation of the three-pronged bailout for cash strapped state governments. www.fidelitybank.ng 4
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance www.fidelitybank.ng 5
Overview of Fidelity Bank Background Key Highlight A full service bank with International Authorisation established in 1987 and licensed by the Central Total Assets N1,159.2 billion Bank of Nigeria The Bank currently has over 400,000 shareholders with the majority being Nigerian citizens and Total Equity N180.3 billion corporations. A Well capitalised bank with a CAR of 20.6% Business Offices 225 Over 85% of the branch network is located in key business centres and the most economically viable regions of Nigeria. No of Accounts 3.2 million A leading partner to the SMEs and key sectors in the Nigerian economy. Professional Staff 3,296 Distribution Network Electronic Banking Business Offices Consumer Sales Agents 915 ATMs 730 Lagos 80 South West 13 POS 3,854 South South 41 Ratings B/B (S&P)/Fitch South East 42 North West 15 North East 7 Auditors Ernst & Young / PKF North Central 11 FCT Abuja 16 www.fidelitybank.ng 6
Outline 1 The Operating Environment 2 Overview of Fidelity Bank 3 Financial Highlights 4 Financial Review 5 2015 Guidance www.fidelitybank.ng 7
Performance Highlights Total Interest Income up by 10.2% to N84.7 billion in 9M 2015 (9M 2014: N76.8 billion) Revenue Net Fee Income up by 7.7% to N21.4 billion in 9M 2015 (9M 2014: N19.9 billion) and Net Interest Margin at 6.9% in 9M 2015 (H1 2015: 6.6%; Q1 2015: 6.2%; 2014FY: 6.0%) Efficiency Ratio PBT increased by 3.0% to N13.8 billion in 9M 2015 (PAT came in at N11.4 billion) Cost of Risk increased to 1.0% in 9M 2015, compared to 0.8% in 2014 FY NPL Ratio: 3.7% as at September 30, 2015 from 4.4% in 2014 FY Asset Quality Coverage Ratio improved to 102.0% in 9M 2015 from 71.6% in 2014 FY FCY Loans accounts for 44.0% of Total Loan Book from 41.9% in 2014 FY Capital Adequacy Ratio of 20.6%, based on Basel II computation Capital Adequacy Liquidity Ratio of 33.4% compared to regulatory minimum of 30.0% and Net Loans to Customer Deposits of 71.5% from 66.1% (2014 FY) Liquidity Total Equity of N180.3 billion from N173.1 billion (2014 FY) www.fidelitybank.ng 8
Financial Highlights Summary of Income Statement: 9M 2015 Vs 9M 2014 N’million 9M 2015 9M 2014 VAR % VAR Gross Earnings 106,570 96,023 10,547 11.0% Interest Income Loans 58,836 51,614 7,222 14.0% Interest Income Liquid Assets 25,854 25,204 650 2.6% Total Interest Income 84,690 76,818 7,872 10.2% Interest Expense Customer Deposits (36,097) (37,212) 1,115 -3.0% Interest Expense Borrowings (7,988) (2,948) (5,040) 171.0% Total Interest Expense (44,085) (40,160) (3,926) 9.8% Net Interest Income 40,605 36,658 3,947 10.8% FX Income 6,316 9,234 (2,918) -31.6% COT 1,608 3,356 (1,748) -52.1% Other Fee Income (Net) 13,459 7,268 6,191 85.2% Net Fee Income 21,383 19,859 1,525 7.7% Operating Income 61,988 56,517 5,471 9.7% Total Expenses (44,756) (40,577) (4,179) 10.3% Net gains / (losses) from Fin. Inst 497 (653) 1,150 -176.0% Net Impairment Losses (3,940) (1,898) (2,042) 107.6% Profit before Tax 13,789 13,389 400 3.0% Please note: Gross Earnings is net of Fees and Commission Expenses www.fidelitybank.ng 9
Financial Highlights Summary of Income Statement: Q-o-Q Change N’million Q3 2015 Q2 2015 Q1 2015 VAR % VAR Gross Earnings 35,765 36,518 34,288 (753) -2.1% Interest Income Loans 20,870 19,396 18,570 1,474 7.6% Interest Income Liquid Assets 7,794 9,512 8,548 (1,718) -18.1% Total Interest Income 28,664 28,908 27,118 (245) -0.8% Interest Expense Customer Deposits (11,905) (11,671) (12,521) (234) 2.0% Interest Expense Borrowings (3,000) (2,780) (2,209) (220) 7.9% Total Interest Expense (14,905) (14,450) (14,730) (454) 3.1% Net Interest Income 13,759 14,458 12,388 (699) -4.8% FX Income 277 1,259 4,780 (983) -78.0% COT 525 503 580 22 4.4% Other Fee Income (Net) 5,402 4,713 3,345 688 14.6% Net Fee Income 6,203 6,476 8,704 (272) -4.2% Operating Income 19,962 20,934 21,093 (971) -4.6% Total Expenses (15,935) (14,994) (13,827) (941) 6.3% Net gains / (losses) from Fin. Inst 898 1,134 (1,535) (236) -20.8% Net Impairment Losses (800) (2,120) (1,020) 1,320 -62.3% Profit before Tax 4,125 4,954 4,710 (829) -16.7% Please note: Gross Earnings is net of Fees and Commission Expenses www.fidelitybank.ng 10
Financial Highlights Statement of Financial Position: 9M 2015 Vs 2014 FY N’million 9M 2015 2014 FY VAR % VAR Total Assets 1,159,184 1,187,025 (27,841) -2.3% Earning Assets 789,058 818,993 (29,935) -3.7% Bank Placements 11,500 42,049 (30,549) -72.7% Treasury Bills 173,719 184,342 (10,623) -5.8% Bonds 56,135 50,917 5,219 10.2% Customer Loans (Naira) 306,473 314,941 (8,468) -2.7% Customer Loans (FCY) 241,230 226,744 14,487 6.4% Non-Earning Assets 370,126 368,032 2,094 0.6% Cash 19,324 33,659 (14,335) -42.6% Cash Reserve 210,244 224,472 (14,228) -6.3% Bal. with other Banks/Settlement Acct 47,822 26,686 21,136 79.2% Fixed Assets 40,735 37,958 2,777 7.3% All Other Assets 52,002 45,257 6,745 14.9% Interest Bearing Liabilities 907,637 937,575 (29,938) -3.2% Demand 400,648 424,397 (23,749) -5.6% Savings 105,925 97,996 7,929 8.1% Time Deposits 259,213 297,641 (38,428) -12.9% Borrowings 53,719 62,547 (8,828) -14.1% Debt Securities 88,133 54,994 33,139 60.3% All Other Liabilities 71,207 76,339 (5,132) -6.7% Equity 180,339 173,111 7,228 4.2% www.fidelitybank.ng 11
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