1 Business & Operating Highlights Overview of the Bank 03 - - PowerPoint PPT Presentation
1 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
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Overview of the Bank Review of Operating Environment Policy Highlights Recap of 2018 Commitments ALAT – Full Digital Bank Leadership Transition 03 04 05 06 07 08
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BBB- (NATIONAL LONG TERM RATING) F3 (LONG TERM RATING) BBB- (SHORT TERM RATING) A3 (LONG TERM RATING)
Pioneer bank in Africa to offer a full digital banking experience
Credit Ratings
5.47%
Earnings
Customer Base
Improved Service Rating
ISMS
ISO
certified
Digital Banking Alternate Banking Channels Branch Network Corporate Governance
National Banking License Ranked 8th in Customer survey Agency Banking partners
319 4120
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Global Economy Domestic Economy Federal Govt. Inflow & Outflow Inflation & Rates
Global Economic Growth
remains robust with projected global growth of 3.9% in 2018.
countries are experiencing an increase in growth”1
increased protectionism impacting global economic growth prospects. Domestic Economy
economy improved during the year, as shown by GDP & PMI data.
flat & demand for forex increases over Q3 & Q4.
– Oil sector growth continue to be subdued. Risks
in the US could diminish investor appetite for frontier markets.
insecurity in the middle belt, North East and the South East region. Oil Price, Reserve & Borrowings
account surplus expected to be lower in 2018 as import growth rebounds.
production cuts by OPEC and Russia records high compliance
to produce enough crude to meet quota.
FGN during the year. The government targets a debt portfolio in favor of foreign issuances. Inflation, Interest rates and Markets.
rate continued its downward trend year-on-year (base effect) from 18.72% (Jan’17) to 11.6% (May’18). Expected to reverse as expansionary budget & election spending increases currency in circulation.
NIBOR rate was 14.9% (January,2018) as against 13.86% at (June, 2018).
treasury bills have dropped from a high of 12.27% as at January, 2018 to 10.2% at June, 2018.
1 Global Economic Prospects, Turning of the Tide - June 2018. A World Bank Group Report. Pg XIII
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Policy highlights reflecting some of the CBN’s activities during the year.
Comments
Central Bank issued revised guidelines to commercial banks
internal capital adequacy and dividend payout policy.
Jan
CBN stopped the charging
commission
retail foreign exchange transactions CBN releases circular to All Deposit Money Banks and Development Finance Institutions
the Commencement
the Non-Oil Exports Stimulation Facility (NESF) First meeting for the year held. Key rates remained unchanged. CBN issues guidelines for $2.5bn currency swap with China CBN signs $2.5bn currency swap with China’s Central Bank
JAN FEB MAR APR MAY JUN
MPC decision leaves rates unchanged
Policy highlights reflecting some of the Central Bank’s activities during the year.
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ume throug
ail and Digi gital al Partne tners rshi hips ps.
continued acceptance of the Wema brand and the improved performance of ALAT our flagship Digital Bank.
increased by 34.54% from N49.83billion (FY2017) to N67.04 billion (H1 2018).
ntin inue ued refr freshi shing ng of
istin ing branch nch networ
itio ional nal strat rategic ic openi nings ngs.
Uyo, Mushin, Oyemekun and Oke Ilewo.
Priorities Status
mprove
servi rvice ce rating rating acr across
the Bank Bank throu through gh impl implement mentin ing the the Purple Purple Rul ules (se (servi rvice ce deliv ivery) Char arter.
continues to improve on service deliveries.
Excellence Expertise Efficiency
velo loping ping new digit ital al capabil abilitie ies.
Card, Loan Disbursement, Group Savings to drive its sustained success.
845 agents. Ongoing Completed
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ALAT has Revolutionized the Banking Space.
Accounts opened
z
Value of transactions executed
Savings Goals Created
Goal-Based Loans
Cards Issued N N N
Loans Disbursed
Transaction volume 852 Virtual Card Issued 3,902 Transactions done $101,069.56 spent
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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.
2018.
capacity subject to regulatory approvals.
Outgoing Managing Director/Chief Executive Officer,
Segun Oloketuyi
Acting Managing Director/Chief Executive Officer,
Ademola Adebise
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2018 Half Year Financial Highlights Earnings Trend Efficiency Efficiency & Margin Analysis Cont’d Deposits Loan Portfolio and Analysis Asset Quality Capital Ratio & Funding Stable Performance 10 11 12 13 14 15 16 17 18
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2018H1 2017H1 2017FY (YOY)% Deposits (customer) N354.88bn N252.00bn N254.50bn 39.44 Loans (net) N223.43bn N206.00bn N215.80bn 3.54 Interest Income N25.39bn N25.36bn N52.66bn 0.12 Non-Interest Income N6.64bn N5.00bn N12.20bn 32.80 2018H1 2017H1 2017FY (YOY)% Net Interest Margin 7.24% 5.70% 6.16% 27 ROAE (annualised) 7.39% 4.96% 4.61% 49 ROAA (annualised) 0.81% 0.61% 0.56% 33 NPL (%) 3.31% 4.91% 3.52% (28) Loan to Deposits 62.96% 81.72% 84.82% (23) Coverage Ratio (%) 91.31% 101.07% 130.16% (10) 2018H1 2017H1 2017FY YOY(%) Gross Earnings N32.03bn N30.37bn N62.68bn 5.47 PBT N1.81bn N1.43bn N3.05bn 26.60 PAT N1.57bn N1.22bn N2.30bn 28.70 CAR 13.27% 12.71% 14.32% 4.41
Earnings, Profit, Capital Revenue Generation Operating Efficiency Margin & Asset Quality
2018H1 2017H1 2017FY YOY(%) Cost-to- Income 88.41% 89.30% 83.78% (1.00) Yield on Assets 18.24% 18.01% 18.82% 1.28 Cost of Risk 0.77% 0.53% 0.64% 45.28 Operating Expenses N13.57bn N11.97bn N26.74bn 13.37
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Non-interest Income Gross Earnings Interest Income
Income Mix (H1’18) Income Mix (H1’17)
Increasing Brand Acceptance Supportive of Earnings Growth
Interest Income 84% Non-Interest Income 16% Interest Income 79% Non-Interest Income 21%
10.45 14.00 17.39 21.45 22.82 6.67 2.96 2.44 3.84 2.21 5 10 15 20 25 30 H1'14 H1'15 H1'16 H1'17 H1'18
N'bn
Cash & cash equivalent Loans & Advances Investment Securities 17.66 17.50 20.16 25.36 25.39 0.54 0.54 0.34 0.08 0.34 1 2 3 4 5 6 7 H1'14 H1'15 H1'16 H1'17 H1'18
N'bn
Net fee & Commission Net trading income Other income Net gain on HFT investment securities 4.10 5.00 6.65 3.17 3.38 20.83 20.87 24.26 30.37 32.06 5 10 15 20 25 30 35 H1'14 H1'15 H1'16 H1 '17 H1'18
N'bn
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2 4 6 8 10 12 14 16 H1'17 Personnel Dep & Amort. Other op. exp. H1'18
N'bn
Operating Expenses Comments Drivers (N’bn)
12.67% 27.86% (2.47%)
▪ Operating expenses increased by 13.37% to N13.57 billion from N11.97 billion as at H1’2017 as a result of increased investments to develop new capabilities. ➢ The drivers for the increase across the three (3) line segments arose from capability development and brand positioning efforts.
efficiency.
2 4 6 8 10 12 14 16 H1'14 H1'15 H1'16 H1'17 H1'18
N'bn
Personnel Expenses Dep & Amort Other Operating Exp Operating lease
Stable Cost Management
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Comments Net Interest Margin Yield on Assets 12.77% 15.93% 16.82% 17.97% 18.24% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% FY'14 FY'15 FY'16 FY17 H1 '18 7.02% 8.25% 7.11% 6.01% 7.24% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% FY'14 FY'15 FY'16 FY17 H1 '18
▪ The environment was reflective of declining consumer prices (inflation) and yields on government securities. This resulted in; ➢ An increase in Yield on Assets to 18.24% (2017; 17.97%), due to increased loan growth during the period under review. ➢ Net Interest Margin (NIM) increased from 6.01% (FY2017) to 7.24% (H1’2018).
expansion
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Deposits (customer) Deposit Type (H1’18) Deposit Mix (H1’18) Comments
High Interest rate Environment Impact Deposit Growth
216.31 234.10 253.84 251.74 354.88 50 100 150 200 250 300 350 400 H1'14 H1'15 H1'16 H1'17 H1 '18
N'bn
▪ The Business continues to benefit from improving brand acceptance, resulting in a 39.44% increase in deposits from N254 billion to N354.88 billion during the period under review. ▪ Customer acquisition initiatives involving partnerships, campus storms and our digital platforms have improved our customer base. ▪ We expect 350,000 ALAT accounts in 2018, adding to deposit growth.
Term 58% Savings 16% Current 23%
Domiciliary Accounts 3% Corporate 14% Retail 16% Treasury 25% Commercial/SME 45%
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▪ The Oil and Gas exposure is comprised of downstream trading entities and an upstream syndicated loan. ▪ General Sector comprises mainly all the personal loans, religious organizations, NGOs and logistic companies while “General Commerce’ Sector covers loans to commercial businesses that deal on general goods. ▪ Construction Sector contains loans that are meant for contract-based construction where repayments are obtained from contract payments whereas, Real Estate Sector covers loans for commercial and residential real estate where repayments come from rents, sales and leases proceeds.
SECTOR H12018 (N'bn) FY2017 (N'bn) Agriculture, Forestry & Fishing 5.62 4.38 Capital Market 3.38 2.43 Construction 30.04 35.39 Education 1.89 2.51 Finance and Insurance 2.73 1.72 General 18.52 22.03 General Commerce 31.28 24.00 Government 12.92 12.74 Manufacturing 9.12 8.15 Oil & Gas 44.50 43.56 Professional, Scientific and Technical 14.53 11.09 Power & Energy 13.61 11.99 Real Estate 27.58 26.98 Transport & Storage 11.91 12.44 Others4 1.80 0.67 Total 229.43 220.08
Breakdown of Gross Loans and Advances Loan Analysis H12018 Comments
Transportation and Storage
Power and Energy Professional, Scientific & Technical Services
Manufacturing
Oil & Gas
Government
General Commerce
General
Finance & Insurance
Education
Capital Market
Agriculture, Forestry & Fishing
Construction
Real Estate Activities
4Others include Admin services, human health, ICT, water supply sewage,
Arts, entertainment and recreation, Human health and social networks
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Low Non-Performing Loans and Adequate Coverage NPL
2.49% 2.67% 5.07% 3.52% 3.31% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% 140.00% 160.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% FY'14 FY '15 FY'16 FY'17 H1'18
Coverage Ratio NPL
NPL Coverge ratio
Net Loans and Loan to Deposit Ratio
50 100 150 200 250 300 350 400 FY'14 FY'15 FY'16 FY'17 H1'18
N'bn
Deposits Net Loans % Loan to Deposit Ratio 57.6% 65.1% 80.1% 84.2% 63.0%
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Shareholders Funds (N’million) Funding Sources
H1’2018 N’m 2017 FY N’m Share Capital 19,287 19,287 Share Premium 8,698 8,698 Retained Earnings 5,736 4,166 Other Reserves 17,255 17,540 Shareholders’ Fund 50,976 49,692
▪ The Bank has concluded the capital reduction exercise and this has been reflected in the accounts ▪ Re-opening the series II of our N50 billion Bond program which should raise our CAR to circa 15% in 2018.
The Bank is a commercial bank with national authorization license at 10%.
Capital Adequacy Ratio (N’m)
Total Regulatory Capital Total Risk Weighted Assets 188,280.61 Capital Adequacy Ratio 13.27% 24,990.07
Deposits (customers) 79% Other borrowed funds 6% Other liabilities 4% Shareholders' fund 11%
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Gross Earnings Deposits (customer) Total Assets Loans & advances (net)
20.8 20.9 24.3 30.4 32.0 5 10 15 20 25 30 35 H1'14 H1'15 H1'16 H1'17 H1'18 N'bn 383 397 421 385 450 340 360 380 400 420 440 460 FY'14 FY'15 FY'16 FY'17 H1'18 N'bn 149 186 227 216 223 50 100 150 200 250 FY'14 FY'15 FY'16 FY'17 H1'18 N'bn 259 285 283 254 355
50 100 150 200 250 300 350 400 FY'14 FY'15 FY'16 FY'17 H1'18
N'bn
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2018 Economic Outlook Strategic Thrust Guidance Appendix 20 21 22 23
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Global Economy
robust and is projected to reach 3.9 percent in 2018. However, threats from protectionist governments actions and trade wars pose real threats.
gradually and from low levels
could lead to a general rate hike across countries.
partnerships as new geo-political alliances emerge mainly around Brexit & the EU-US rupture.
Domestic Economy
crude oil production to 1.6mbpd in May, signals reduced inflow to government coffers.
implementation
the 2018 expansionary federal budget increases naira liquidity. This might drive rates up if coupled with pre-election spending.
federal budget should translate to an improvement in the economy.
Domestic Market
stable in the short term. We believe the strategic building of buffers (FX reserve) would mitigate negative shocks.
downturn as investors wait on the side lines to monitor the outcome of the 2019 general elections.
could become elevated.
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Our Strategic Pillars
Improving market share and efficiency by leveraging digital capabilities Innovation Agile Execution Partnerships & Alliances Drive profitable growth in the core Grow market share in Retail & SME Transform Customer Experience Digitize Business and Operations Build a High Performing Team
Drive aggressive growth in commercial banking Grow retail customer base by developing internal capacity and leveraging technology to deliver value adding products Be the Bank of choice in service delivery through differentiated end-to-end experiences across all customer journeys and touch points Optimise the use of technology to drive efficient business
processes Transform
culture to enhance staff skills, capabilities and attitudes in
business
Enhance Capital & Funding
Raise additional tier 1 & 2 capital to support projected business growth
Driving Growth through Digital Capabilities
Key Enablers Overall Aspiration
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FY 2017 Actual HI 2018 Actual 2018 Guidance H2 2018 Guidance Customer Deposit Growth (10.19%) 39% 15% *50% Loan Growth (4.92%) 3.5% 10% 10% Non-Interest Income Growth +24.39% 33% 25% *35% Net Interest Margin 6.61% 7.24% 6.5% - 7% *7.5% Cost to Income Ratio (%) 89.90% 88.4% 75% - 80% 75%-80% NPL 3.52% 3.31% <5% <5% Return on Average Equity 4.60% 7.39% 10% 10%
* The guidance was improved after H1 2018.
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Statement Of Profit Or Loss And Other Comprehensive Income
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Statement of Financial Position as at 31 December,2017
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In the course of the year, the following changes were made to the Board
Segun Oloketuyi
Outgoing Managing Director/Chief Executive Officer
Ademola Adebise
Acting Managing Director/Chief Executive Officer
Folake Sanu
Executive Director Business Support
Wole Akinleye
Executive Director Corporate and South Bank
Moruf Oseni
Executive Director Digital Bank
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Forward Looking Statements
Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the transactions described in this
identify forward-looking statements.
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.
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.
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