Fidelity Bank Plc: Management Presentation Half Year 2012 Financial - - PowerPoint PPT Presentation

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Fidelity Bank Plc: Management Presentation Half Year 2012 Financial Results

July, 2012

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Fidelity Overview

1

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SHARE D VALUE S

Custome r F irst Re spe c t E xc e lle nc e Sha re d a mbition T e na c ity

To be No.1 in every market we serve and for every branded product we offer To make Financial Services Easy and Accessible

Mission Vision Our Guiding Philosophy

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One of Nigeria’s Safest and Strongest Financial Institutions

Liquidity Ratio Capital Adequacy Ratio

Fidelity may not be the biggest, but we are one

• f the strongest, most

stable, safe and consistent banks in Nigeria.

The Banker Magazine’s 2012 Report ranks Fidelity as “The Soundest Bank” in Nigeria. Fidelity has been consistent in making profit and issuing dividend in the last 8 Years.

133.0 141.7 37.5% 29.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

• 30.0

60.0 90.0 120.0 150.0 Jun 2011 Jun 2012

Total Capital (N'bn) Capital Adequacy Ratio

56.7% 47.2% 10.0% 25.0% 40.0% 55.0% 70.0% Jun 2011 Jun 2012

Fidelity LR Regulatory Minimum

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1987 1989 1999 2001 2005 2006 2007

• Fidelity

incorporated as a Private Limited Liability Company

• Commenced
• perations as a

Merchant Bank

• Licensed to
• perate as a

universal bank

• Accepted into

and Quoted on the Nigeria Stock Exchange

• Registered as

a Public Limited Liability

• Company

Converted to Commercial Bank

• Resolved all

Merger integration issues

• Raised Equity

to US$1bn through GDR & Public Offer

Over 24 Years . . . Still Counting

• Raised Equity

to N22bn (Rights, IPO and Private Placement)

• Acquired FSB

Int’l Bank Plc and Manny Bank Plc

The Most Socially Responsible Bank in Africa 2008 – The African Banker

Today, Fidelity is one

• f the safest, soundest

and most stable financial institutions in Nigeria.

 6th Biggest Bank in Nigeria - 2012  17th Biggest Bank in Africa - 2012  618th Biggest in the World - 2012  The Soundest Bank in Nigeria - 2012

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Over 24 Years . . . We Keep Getting Better

• Appointe d Whole sale De ale r

in F

• r

e ign Cur r e nc ie s - 2006

• CBN Mandate d Manage r
• f

Sove r e ign Re se r ve – 2006

• CBN appointe d Pr

imar y De ale r in T r e asur y Bills and Mone y Mar ke t Instr ume nts - 2007

Nominated:  Most Improved Bank – 2005  Best Fund Manager – 2005  Best Stock Offer - 2005 Mandated by Debt Mgt Office (DMO) in 2006 as:

• Dealer in FGN Bonds
• Dealer in Pensioners

Bond

• Dealer in Contractors

Bond

• Best Bond Dealer and

Market Maker in 2006, 2008

Awards and Recognitions:

• Africa’s Most Socially Responsible Bank – The Banker Magazine, Washington

DC, 2008

• The Most Efficient Bank in Clearing Data Transmission – Nigerian Interbank

Settlement Scheme 2011

• The Most Punctual Bank – Nigerian Interbank Settlement Scheme 2011
• The Most Socially Responsible Bank in Nigeria – SERA Awards –

2007, 2008, 2009, 2010

• Award for Error- Free Transaction Processing– Deutsche Bank - 2011

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Strategic Alliances and Global Partnerships

A partner of strategic choice for global financial institutions. Our strategic partnerships provide us global reach and the benefit of knowledge transfer in our quest to implement best practices.

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73.3% 19.4% 3.5% 3.1% 0.4% 0.4% 0.0% 20.0% 40.0% 60.0% 80.0%

Limited Insider Ownership

Shareholding Structure

 Insiders have relatively small shareholder

• wnership and control

 Fidelity is led by a stable, experienced and well regarded management team that has successfully grown a company that is built on quality and driven by a managed risk philosophy.  S ince inception in 1987, Management has guided the Bank through several key industry changes and market developments.

Diverse Shareholder Distribution

 Diverse shareholder base wit h no cont rolling shareholder; over 400,000 shareholders  No single shareholder owns more t han 5%

• f

t ot al share capit al  Diversificat ion of shareholding and absence

• f concent rat ion has enabled Fidelit y t o
• perat e under world class corporat e

governance pract ices and t he professionalizat ion of it s Management and corporat e cult ure.

Shareholder Distribution Total Insider Holding 5% Outsiders 95%

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Group Financial Highlights

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Group H1-2012 - Summary F inanc ial Re sults

HALF YEAR FINANCIAL HIGHLIGHTS (Naira in million)

H1-2012 H1-2011 % Change

Gross Earnings 51,898 29,917 73.5% Net Interest Income 20,179 12,417 62.5% Non-interest Income 13,338 9,677 30.7% Impairment Charges (720) (1,801)

• 60.0%

Profit Before Tax 9,878 3,818 160.0% Cost/Income ratio 70% 82% RoE (Pre-tax) 13.9% 5.8% RoA (Pre-tax) 2.7% 1.5%

Jun 2012 Jun 2011 % Charge

Equity 141,651 133,000 6.5% Deposits 554,097 554,097 61.0% Net Loans to Banks 85,569 126,162

• 32.2%

Net Loans to Customer 274,482 201,376 36.3% Total Assets 736,935 502,596 46.6% NPL / Loans 6.1% 16.0%

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Revenue

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Re ve nue

Gross Earnings Interest Income Profit Before Tax (PBT)

29,917 51,899

• 9,000

18,000 27,000 36,000 45,000 54,000 H1-2011 H1-2012 N'million 3,818 9,878

• 2,000

4,000 6,000 8,000 10,000 H1-2011 H1-2012 N'million

 Revenue sustained positive growth on the back

• f increased loan book, non interest income and

activity in the inter-bank market.

 Gross Earnings grew by 79%

which is in tandem with the 102% growth recorded in Interest Income.

 PBT to Gross Earnings moved up from 13.2%

to 19% underpinning improved efficiency in the deployment of resources.

19,884 40,241

• 9,000

18,000 27,000 36,000 45,000 H1-2011 H1-2012 N'million

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Non-inte re st Inc ome

Non-interest Income

9,677 13,338

• 3,000

6,000 9,000 12,000 15,000 H1-2011 H1-2012 N'million

Composition of Non-interest Income

FX Income, 34% Fees & Com, 42% Other Income, 24%

H1-2012

FX Income, 54% Fees & Com, 33% Other Income, 13%

H1-2011

 About 90%

• f Non-interest Income came from

core business activity with Fees and Commission accounting for the largest share.

 As we continue to explain growth in our

customer count and pass-through volumes, we expect the effect of refined payment systems to continue to increase our activity based income.

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Efficiency Ratios

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Net Interest Income

Profitability Dynamic s

Return on Assets and Return on Equity

1.5% 2.7% 5.8% 14.2% 0.0% 3.0% 6.0% 9.0% 12.0% 15.0% H1-2011 H1-2012 RoA (pre-tax) RoE (pre-tax)

 Alongside the recorded growth in Net Loans to

customers, Net-interest Income increased by 66% to N20.2 billion.

 RoE and RoA (annualised) recorded significant

improvement between H1-2011 and H1-2012.

 Continued implementation of our process

rescheduling initiatives and expansion in trading volumes from existing and new relationships would continue to reflect in improved returns to our shareholders. 12,417 20,179

• 3,700

7,400 11,100 14,800 18,500 22,200 H1-2011 H1-2012 N'million

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Interest Expense

Cost Dynamic s

Operating Expense & Cost-Income Ratio Breakdown of Operating Expense

7,738 20,062 3,500 7,000 10,500 14,000 17,500 21,000 H1-2011 H1-2012 N'million

16,535 23,182 81.2% 70.3% 64.0% 72.0% 80.0% 88.0% 96.0%

• 5,000

10,000 15,000 20,000 25,000 H1-2011 H1-2012 N'million

Operating Expense Cost-Income Ratio

49% 48% 10% 8% 42% 44% 0% 25% 50% 75% 100% H1-2011 H1-2012

Other Opex Depreciate S taff Cost

 The increase in Monetary Policy Rate (MPR) to 12.0%

in October 2011 raised cost of funds and reward for deposits across maturities.

 S

ustained branch expansion activity also kept cost- income ratio at high levels above our target band. Our target is to trend it down to the mid-60 range by financial year end 2012.

 S

taff cost, which constitutes 48%

• f total operating

expenses in 2012, is trending downwards on the back of continued extraction of value from our process rescheduling and technology deployment despite growing branch network.

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Balance Sheet Structure

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Total Assets

F unding Struc ture

Total Capital Composition of Funding Sources

502.6 736.9

• 170

340 510 680 850 Jun 2011 Jun 2012 N'billion 133.0 141.7

• 30

60 90 120 150 Jun 2011 Jun 2012 N'billion

68.5% 75.2% 26.5% 19.2% 5.1% 5.6% 0% 20% 40% 60% 80% 100% Jun 2011 Jun 2012

Other Liabilities Equity Deposits

 Fidelity would continue to emphasis a self

funded balance sheet.

 Balance sheet growth was largely from 61.0%

increase in customer deposits.

 In the last 12 months, we switched on 10 new

branches which has helped to push our deposit numbers while maintaining a balanced mix. 46.9%

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Net Loans and Advances

Analysis of L

• ans and De posits

Customer Deposits

344.2 554.1

• 150.0

300.0 450.0 600.0 Jun 2011 Jun 2012 N'billion Demand, 47.1% Savings, 21.0% Tenure, 31.9% 201.4 274.5

• 50.0

100.0 150.0 200.0 250.0 300.0 Jun 2011 Jun 2012 N'billion

Lease Finance, 11% Term Loans, 57% Overdraft, 3 1% Other Advances, 1%

36.3% 61%

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Capital Adequacy & Non-performing Loans

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Equity & Capital Adequacy Ratio (CAR)

Capital Ade quac y, L iquidity & NPL

Non-performing Loans (NPL) Equity/Total Assets Ratio

133.0 141.7 37.5% 29.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

• 30.0

60.0 90.0 120.0 150.0 Jun 2011 Jun 2012

Total Capital (N'bn) Capital Adequacy Ratio

16.0% 6.1% 87% 110% 0% 30% 60% 90% 120% 150% 0.0% 6.0% 12.0% 18.0% Jun 2011 Jun 2012 Coverage NPL Rat io

NPL Ratio % Loan Prov. to NPL

26.5% 19.2% 0.0% 7.0% 14.0% 21.0% 28.0% 35.0% Jun 2011 Jun 2012

Liquidity Ratio

56.7% 47.2% 10.0% 25.0% 40.0% 55.0% 70.0% Jun 2011 Jun 2012

Fidelity LR Regulatory Minimum

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21 Strong Financial Performance and Profitability Sustained Quality Asset Growth Sound Risk Management Practice Rapidly Growing Distribution Network Transparent Corporate Governance

Strong Management Team and Corporate Culture

Strong Market Position Strong Corporate/ SME Franchise

Fidelity Has A Solid Platform for Quality and Expansion