Wema We ma Ban ank Plc FY 2015 Results sults Presentation sentation 1 1
Cauti tionary nary Note Regardin ding Forwar ard d Looking ing Statem tements ents 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 transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and • assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Bank and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation. Any forward-looking statement contained in this presentation, based on past or current trends and/or activities of Wema • Bank should not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Bank for the current year or future years will necessarily match or exceed the historical or published earnings of the Bank. Each forward-looking statement speaks only as of the date of the particular statement. Wema Bank expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Wema Bank’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 2 2
sectio ion page 1 Overvie rview w of Operating ating Envir ironmen onment 4 2 Financial Highlights 10 3 Outlook 23 3
The Bank k at a t a Gl Glance ce (Dec 2015) Credit it Rati ting ngs (nga) Wema Bank Number r of Number r of Accounts nts Emplo loyee ees The Bank is Fitch: h: Bbb- licensed by the CBN as a National 1,080 1.7 million Bank Agusto sto & & Co: : Bbb- Channe nels ls Total al Assets ₦ 397bn 136 210 4,550 Total al Equit ity branches ATMs PoS Terminals ₦ 46.1bn Listin ting Authorized rized capi pital tal Audit itor ors of ₦ 20billion Nigerian Stock Nation ional al divided into 40 Exchange Coverage age billion ordinary Akintola Williams Deloitte NSE E Ticke ker: shares WEMABANK 4 4 4
Overv ervie iew of Operati ating Env nvir ironme onment nt The followin wing g changes ges in the operatin ing g environmen ment t impacte ted perfo form rmance e in 2015 • Growth in the global economy remains muted; Global bal develo lopmen ments – US Fed, Brex exit it & & future interest rate changes will impact growth Euro rozon zone, slowd wdown wn in China and extra racti tive ve in both developed and emerging economies. economi mies es • The Federal Government has introduced a number of policies and schemes to stimulate growth and improve the revenue base. We Fiscal l policie ies: State te Bail il-outs, ts, Interven rventi tion expect such initiatives to continue in 2016. schemes, emes, tax policie ies • The regulator has used a number of means to regulate FX supply given dwindling FX revenues. The outlook for oil prices remains cautious. Oil Price e and Exchange ge rate e stabi bili lity ty • Regulators have made changes to the provisioning regime – General Loan Loss Provision for performing loans has been Regulato latory ry policie ies and impact t on short rt increased from 1% to 2%. The Monetary Policy term m growt wth Rate (MPR) and Credit Reserve Ratio (CRR) have been increased by 100bps and 250bps respectively. • Rising inflation concerns remain. Increasing Subdued ed consumer mer dema mand pressure on foreign exchange liquidity has also affected the cost of goods thus, reducing disposable income. 5 5
2015 15 Full-Ye Year Result lts Snaps pshot ot 2015 2015 2014 2014 % change ge Comprehensive Gross Earnings N45.9 bn N42.2 bn 9.5 Income & Profit Net Operating Income N26.5 bn N25.2 bn 5.2 Trend Operating Expenses N23.4 bn N22.1 bn 5.9 Profit Before Tax N3.05 bn N3.09 bn -1.3 Efficiency & Cost-To-Income Ratio 88.5% 87.7% Return Return on Average Equity 5.2% 5.4% Business Total Loan to Deposit Ratio 65.1% 57.7% Capacity & Capital Adequacy Ratio 15.1%* 18.2% Asset Quality Ratios Non-Performing Loan Ratio 2.7% 2.5% *Capital adequacy reduced by 200bps due to new CBN reporting template 6 6 6
Update ates on n 20 2015 15 Co Commit mitme ment nts OBJECTIV TIVES TASK Growing Business Improved Deposit growth during the year despite TSA impact • (Customer deposit growth of 9.50%) o Increase lending to productive sectors • (Year-on-year Loan growth of 25%) o Grow top line earnings by gradual portfolio shift • (Year-on-year Interest income growth of 6%) o Capital Raise & Improving capital and funding • Funding The process for Tier 2 Capital (N15-20 billion) has commenced. Expected to o be concluded in Q2 2016 Consistent repayment of existing Tier 2 capital o Improving efficiency Improved operational efficiency through better use of technology • OpEx growth of 5.9%, below 2015 Inflation average of 9% o ISO 27001 and 20000 Certifications o Brand Refresh and Obtained National License • Network Expansion Expected to re-open Minna, Lokoja, Aba, Enugu and Kaduna - by H1 o Additional branches being developed in existing commercial hubs • Opened 10 new branches in South-West and South-South; 5 more under o construction in – Lagos, PH, Abuja Deploy alternative Continued deployment of alternative channels – POS, ATMs, web and mobile • channels applications ATM deployment increased by 24% to 210; o POS increased by 35% to 4,550 o Number of active cards increased by 26% o 7 7 7
The he Bank nk ha has s improve ved 201 015 Perception Brand refreshed; younger and more vibrant look Banking Obtained National Banking Authorization License Capital N 46billion in Shareholders’ funds (up 15% from 2014) Additional Tier 2 expected before end of H1 Market share Improved Market Share (of customer deposits) of >1.5% Processes Increased number of automated processes Improved customer on-boarding process Technology Robust mobile and internet banking platforms NPL 2.67% NPLs Performance Sustained Profitability 8 8 8
sectio ion page 1 Overview of Operating Environment 4 2 Fina nanc ncial ial Highl ghlights ights 10 10 3 Outlook 23 9
Financ ancia ial l High ghli ligh ghts ts 2015 FY 2014 FY Change ge PBT ₦ 3.0b ₦ 3.1b PAT ₦ 2.3b ₦ 2.4b Financ nancial al Highl ghlights hts Capit ital l Adequacy Rati tio 15.1% 18.8% Earni rnings gs per Share 6k 6k Deposit its ₦ 285b ₦ 259b Loan book (Net et) ₦ 185.6b ₦ 149.3b Revenue nue Gene neratio tion Interest est Income me ₦ 37.1b ₦ 35.5b Non Interest est Income me ₦ 8.9b ₦ 6.7b Cost to income me rati tio 88.5% 87.7% Operatio tiona nal Effic ficienc ncy Cost of funds 5.7% 5.2% Operati ting g expenses es ₦ 23.5b ₦ 22.1b heh Net Interest est Marg rgin in 7.2% 8.3% Return rn on Equit ity 7% 7.3% Margins ns & Qual ality ty NPLs 2.7% 2.5% 10 10 10
Earnings nings & Profitabi fitabili lity y Trends ds Gross earnings Cost to Income Ratio 50 40 ₦'billion 143% 143% 130% 130% 30 95% 95% 20 88% 88% 88% 88% 10 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 ₦ 'milli lion ₦ 'milli lion ₦ 'milli lion ₦ 'milli lion ₦ ‘million Gross ss ear arnin ings s 22,773.92 30,716.39 35,184.21 42,186.87 45,869.44 2011 2012 2013 2014 2015 Profi fit/(lo /(loss ss) ) befor fore taxat atio ion (3,770.02) (4,942.21) 1,947.31 3,093.94 3,045.53 Profi fit/(lo /(loss ss) ) after taxat atio ion (4,228.93) (5,040.63) 1,596.53 2,372,45 2,327.28 Net Interest st Margin in 6.23% 4.48% 7.01% 8.25% 7.17% Cost st to Inco come Ratio io 129.88% 142.56% 95.15% 87.72% 88.50% Return on averag age equit ity -35.73% -130.98% 9.13% 7.27% 6.78% Return on averag age asse sets -1.78% -2.12% 0.68% 0.87% 0.78% • Gross Earni rnings gs of of ₦ 45 45.86 86bi bill llio ion up up 9.5% in in 2015 2015 (from 2014 2014 - ₦ 42 42.18 18bi bill llio ion) • PBT of of ₦ 3.05 05bi bill llio ion in in 2015 2015 down margin ginall lly 0.01 01% compar pared ed to to ₦ 3.09 09bil illi lion in in 2014 2014 11 11 11
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