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Business & Operating Highlights Overview of the Bank 03 Review of Operating Environment 04 Policy Highlights 05 Recap of 2018 Commitments 06 ALAT – Full Digital Bank 07 Leadership Transition 08 1 2 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Overview of the Bank Digital Credit Banking Ratings BBB- (SHORT TERM RATING) BBB- (NATIONAL LONG TERM RATING) A3 (LONG TERM RATING) F3 (LONG TERM RATING) Pioneer bank in Africa to offer a Earnings N32.03 bn full digital banking experience 5.47 % Customer Alternate Base 2.17 mn Banking Channels 4120 319 Branch Agency Improved ISMS Network Banking partners Service ISO Rating 845 certified 151 Branches National Ranked Corporate 8 th in Banking Governance License Customer survey 3 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Review of Operating Environment Inflation & Rates Federal Govt. Inflow & Global Economy Domestic Economy Outflow Inflation, Interest rates and Global Economic Growth Domestic Economy Oil Price, Reserve & Borrowings Markets. • • • Growth has eased but still Domestic economy improved Current account surplus • Inflation rate continued its remains robust with during the year, as shown by expected to be lower in 2018 as downward trend year-on-year projected global growth of GDP & PMI data. import growth rebounds. (base effect) from 18.72% • 3.9% in 2018. Increased pressure on Naira as (Jan’ 17) to 11.6% (May’ 18). • oil production capacity remains Oil price rebounds as agreed Expected to reverse as • ‘ ’About half of the world’s flat & demand for forex production cuts by OPEC and expansionary budget & election countries are experiencing an increases over Q3 & Q4. Russia records high compliance spending increases currency in • increase in growth ” 1 Non – Oil sector growth rate. Nigeria presently unable circulation. continue to be subdued. to produce enough crude to • However, increased meet quota. protectionism impacting • 1mth NIBOR rate was 14.9% Risks global economic growth (January,2018) as against 13.86% • • A tightening of monetary policy Increased debt issuances by the prospects. at (June, 2018). in the US could diminish investor FGN during the year. The appetite for frontier markets. government targets a debt • Yields on treasury bills have portfolio in favor of foreign dropped from a high of 12.27% as • Increased insecurity in the issuances. at January, 2018 to 10.2% at middle belt, North East and the June, 2018. South East region. 1 Global Economic Prospects, Turning of the Tide - June 2018. A World Bank Group Report. Pg XIII 4 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Policy Highlights CBN issues guidelines for CBN stopped the charging of First meeting for the year held. Key rates $2.5bn currency swap with commission on retail foreign remained unchanged. China exchange transactions CBN signs $2.5bn currency swap with China’s Central Bank JAN FEB MAR APR MAY JUN CBN releases circular to All Deposit Central Bank issued revised MPC decision leaves rates Money Banks and Development guidelines to commercial unchanged Finance Institutions on the banks on internal capital Commencement of the Non-Oil adequacy and dividend Exports Stimulation Facility (NESF) payout policy. Policy highlights reflecting some of the CBN’s activities during the year . Comments Jan Policy highlights reflecting some of the Central Bank’s activities during the year. 5 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Recap of 2018 Commitments Priorities Status Grow ow deposi osit volum ume throug ough Retail ail and Digi gital al Partne tners rshi hips ps. • o Deposit volumes increased by 39.4% to N354.88billion (2017; N254.5billion) on the back of continued acceptance of the Wema brand and the improved performance of ALAT our flagship Digital Bank. o Savings deposit increased by 34.54% from N49.83billion (FY2017) to N67.04 billion (H1 2018). Cont ntin inue ued refr freshi shing ng of of exist istin ing branch nch networ ork & addit itio ional nal strat rategic ic openi nings ngs. Excellence • o New branches opened – Sangotedo, Jebba and Aba. Refreshed branches include Agege, Uyo, Mushin, Oyemekun and Oke Ilewo. Impr mprove oved se servi rvice ce rating rating acr across oss the the Bank Bank throu through gh impl implement mentin ing the the Purple Purple Rul ules (se (servi rvice ce • deliv ivery) Char arter. o Industry rating shows positive signs as the bank is currently 8th (KPMG). The Bank continues to improve on service deliveries. Deve velo loping ping new digit ital al capabil abilitie ies. • o Our digital bank (ALAT) launched in 2017 has unveiled new features such as the Virtual Dollar Expertise Card, Loan Disbursement, Group Savings to drive its sustained success. o Launched agency banking in 19 States, including the Federal Capital Territory (FCT) with about 845 agents. o Net Interest Margin increased from 6.61% (2017) to 7.24% in H1 2018. Efficiency o Capital reduction exercise concluded and reflected in the balance sheet. Ongoing Completed 6 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Full Digital Bank ALAT has Revolutionized the Banking Space. N N N z 258,007+ N39bn 53,017 614 119,610 Accounts opened Value of transactions Savings Goals Created Goal-Based Loans Cards Issued executed > N2.5bn $113k+ N40mn CUSTOMER DEPOSITS Transaction volume 852 Virtual Card Issued Loans Disbursed 3,902 Transactions done $ 101,069.56 spent 7 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Leadership Transition Salary ary for Love In Febr brua uary ry, staff f of the Bank donated d a day’s salary to orphanages and elderly rly homes. . Our cont ntinued inued way of saying ing we care. Outgoing Managing Director/Chief Executive Officer, Acting Managing Director/Chief Executive Officer, Segun Oloketuyi Ademola Adebise • CEO/Managing Director Segun Oloketuyi proceeded on terminal leave on July 01, 2018 and will retire effective from September 30 2018. • The Board has approved the erstwhile Deputy Managing Director, Ademola Adebise as the CEO/Managing Director in an acting capacity subject to regulatory approvals. 8 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Financial Performance 2018 Half Year Financial Highlights 10 Earnings Trend 11 Efficiency 12 Efficiency & Margin Analysis Cont’d 13 Deposits 14 Loan Portfolio and Analysis 15 Asset Quality 16 2 Capital Ratio & Funding 17 Stable Performance 18 9 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
2018 Half Year Financial Highlights 2018H1 2017H1 2017FY YOY(%) 2018H1 2017H1 2017FY (YOY)% Gross Earnings N32.03bn N30.37bn N62.68bn 5.47 Deposits N354.88bn N252.00bn N254.50bn 39.44 (customer) PBT N1.81bn N1.43bn N3.05bn 26.60 Loans (net) N223.43bn N206.00bn N215.80bn 3.54 PAT N1.57bn N1.22bn N2.30bn 28.70 Interest N25.39bn N25.36bn N52.66bn 0.12 Income CAR 13.27% 12.71% 14.32% 4.41 Non-Interest N6.64bn N5.00bn N12.20bn 32.80 Income Earnings, Profit, Capital Revenue Generation Operating Efficiency Margin & Asset Quality 2018H1 2017H1 2017FY YOY(%) 2018H1 2017H1 2017FY (YOY)% Cost-to- Net Interest 88.41% 89.30% 83.78% (1.00) 7.24% 5.70% 6.16% 27 Income Margin Yield on ROAE 18.24% 18.01% 18.82% 1.28 7.39% 4.96% 4.61% 49 Assets (annualised) Cost of Risk 0.77% 0.53% 0.64% 45.28 ROAA 0.81% 0.61% 0.56% 33 (annualised) Operating N13.57bn N11.97bn N26.74bn 13.37 NPL (%) 3.31% 4.91% 3.52% (28) Expenses Loan to Deposits 62.96% 81.72% 84.82% (23) Coverage Ratio 91.31% 101.07% 130.16% (10) (%) 10 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
Earnings Trend Increasing Brand Acceptance Supportive of Earnings Growth Gross Earnings Income Mix (H1’17) Income Mix (H1’18) 35 32.06 N'bn 30.37 30 Non-Interest 24.26 Non-Interest Income 25 20.83 20.87 Income 16% 21% 20 15 10 Interest Income 5 Interest Income 79% 84% 0 H1'14 H1'15 H1'16 H1 '17 H1'18 Interest Income Non-interest Income 6.65 7 25.39 30 25.36 N'bn N'bn 6 5.00 20.16 25 2.21 17.50 3.84 17.66 4.10 5 20 2.44 3.17 3.38 4 2.96 15 6.67 3 22.82 21.45 10 17.39 14.00 2 10.45 5 1 0 0.54 0.08 0.34 0.54 0.34 0 H1'14 H1'15 H1'16 H1'17 H1'18 H1'14 H1'15 H1'16 H1'17 H1'18 Cash & cash equivalent Loans & Advances Investment Securities Net fee & Commission Net trading income Other income Net gain on HFT investment securities 11 P r e s e n t a t i o n t o A n a l y s t & I n v e s t o r s - H a l f Y e a r 2 0 1 8
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