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First Bank of NigeriaFull Year December 2011 & First Quarter 2012 Results
Presentation to Analysts and Investors
Overview & Operating Environment
Financial Review
Risk Management
Strategy
q Speaker: Group Managing Director Bisi Onasanya (Slides 4 – 6)
q Speaker: Chief Financial Officer Bayo Adelabu (Slides 7 – 25)
q Speaker: Chief Risk Officer Remi Odunlami (Slides 26 – 30)
q Speaker: Chief Strategy Officer Onche Ugbabe (Slides 31 – 40)
Outline
Summaryq Speaker: Group Managing Director Bisi Onasanya (Slide 41)
© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 3
Disclaimer
This presentation is based on First Bank of Nigeria Plc’s (‘FirstBank’ or the ‘Group’ or the ‘Bank’) audited results for the yearended December 31, 2011 and unaudited IFRS results for the period ended March 31, 2012. To promotecomparability, during this transition to IFRS reporting from NGAAP, all results presented up to and including December31, 2011 are prepared using NGAAP. The first quarter result for the period ended March 31, 2012 together with the 2011comparable numbers have been shown separately using IFRS.
FirstBank has obtained some information from sources it believes to be credible. Although FirstBank has taken allreasonable care to ensure that all information herein is accurate and correct, FirstBank makes no representation orwarranty, express or implied, as to the accuracy, correctness or completeness of the information. In addition, some of theinformation in this presentation may be condensed or incomplete, and this presentation may not contain all materialinformation in respect of FirstBank.
This presentation contains forward-looking statements which reflect management's expectations regarding the group’sfuture growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as“anticipate”, “believe”, “expects”, “intend”, “estimate”, “project”, “target”, “risks”, “goals” and similar terms and phrases havebeen used to identify the forward-looking statements. These statements reflect management's current beliefs and arebased on information currently available to the Bank's management. Certain material factors or assumptions have beenapplied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject toinherent risks and uncertainties surrounding future expectations generally.
FirstBank cautions readers that a number of factors could cause actual results, performance or achievements to differmaterially from the results discussed or implied in the forward-looking statements. These factors should be consideredcarefully and undue reliance should not be placed on the forward-looking statements. For additional information with respectto certain of these risks or factors, reference should be made to the Bank's continuous disclosure materials filed from time totime with the Nigerian banking regulatory authorities. The Bank disclaims any intention or obligation to update or revise anyforward-looking statements, whether as a result of new information, future events or otherwise.
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4
First Bank of Nigeria is a diversified financial services group
© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
FirstBank
First Bank (UK)
Limited
First Bank (UK)
Limited
First Registrars
First Registrars
FBN Insurance Brokers
FBN Insurance Brokers
FBN Life AssuranceFBN Life
AssuranceFirst
FundsFirst
FundsFirst
TrusteesFirst
TrusteesFBN
MortgagesFBN
Mortgages
First Pension
Custodian
First Pension
Custodian
FBN Capital
FBN Capital
FBN Bureau de
Change
FBN Bureau de
Change
FBN Microfinance
Bank
FBN Microfinance
Bank
Banqueinternationale
de Credit
Banqueinternationale
de Credit
South Africa Rep. Office
South Africa Rep. Office
China Rep. Office
China Rep. Office
Abu Dhabi Rep. Office
Abu Dhabi Rep. Office
FBN Bank (UK)
Limited Paris
Branch
FBN Bank (UK)
Limited Paris
Branch
FBN Securities
FBN Securities
The FirstBank Group comprises 12 subsidiaries, spanning asset management, investment banking, capitalmarkets, insurance, microfinance, private equity, mortgage and pension fund custodian services – making it one of themost diversified financial conglomerates on the continent
5
2011: Continued progress towards achieving broader strategic imperativesS
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
Highlights
Macro Considerations
• Very strong deposit growth
• Accelerated earnings and margin expansion
• Rising non-interest income
• Improving efficiency levels
• Stronger business volumes and increasing share of the market
• Rising interest rate environment
• Stable exchange rates
• Fluctuating inflation rate
• Higher oil prices
• Restructuring for growth
• Business line expansion
• International expansion
• Group synergies and cross-selling
• Sequencing growth systematically
• Growth and efficiency
• Service excellence
• Performance management
• Talent management
Group Strategic Focus
Bank Strategic Focus
6
Improving outlook for the Nigerian economy
Global Economy• Static global economic growth in 2011, estimated at 4.0% by the IMF• Growth driven by developing economies
The Nigerian Economy• According to the Nigerian Bureau of Statistics (NBS), GDP grew by
7.36% in 2011, as against 7.98% in 2010, driven largely by the non-oilsector
• Inflation yoy declined from 12.1% in January 2011 to 10.3% as atDecember 2011; bringing the average inflation rate for 2011 to 10.9%(2010: 13.8%). This rose to 12.8% yoy as at March 2012
• Consistent increase in the monetary policy rate (MPR) by the CBN from6.5% in January 2011 to 12% as at October 2011 as a pre-emptivemeasure to reduce inflation. MPR currently maintained at 12%
• The mid-point of target official exchange rate was adjusted fromN150/US$1 to N155/US$1 and the band of +/-3.0% was maintainedamid pressure on the currency and by extension the external foreignreserves
• Phased removal of fuel subsidy
The Banking Industry• Industry wide IFRS reporting implementation commencing from March
2012• Industry NPLs have reduced from 18% in 2009 to an estimated 9% due
to the purchase of NPLs of about N3.14 trillion from the bankingindustry by AMCON; freeing up balance sheets for stronger creditgrowth
• 33% growth in credit to the private sector to N12.9 trillion in 2011• Cashless policy being introduced by the CBN with effect from April 2012• Mobile banking licenses granted to a number of banks
0
1
2
3
4
60
90
120
150
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11
Bonny light price Domestic production (right scale)
Oil production and price
0
10
20
30
40
50
144
148
152
156
160
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
Foreign reserves (right scale) Exchange rates
Exchange rates and foreign reserves
0
5
10
15
20
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12
Monetary policy rate Prime lending rate Interbank call rate
T-bills Inflation
Rates
Source: CBN, NBS
$ Mbpd
N $
%
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
7
Earnings
Profitability
• 27.6% growth in gross earnings to N296.3 billion (2010: N232.1 billion)
• 45.6% growth in operating income to N259.2 billion (2010: N178.1billion)
• Non-interest income contribution of 25.6% (Dec10: 24.3%)
• 93% growth in profit before tax and exceptional item to N65.6 billion (2010: N34 billion)
• 48% growth in profit before tax to N50.1billionn (Dec 10: N33.8billion)
• Cost to income ratio: 56.8% (Dec10: 67.0%)
• After tax ROAE: 13.0% (Dec10: 9.6%)
• After tax ROAA: 1.8% (Dec 10: 1.4%)
• EPS: N1.40 (Dec 10: N0.95)
• Net interest margin: 8.0% (Dec 10: 6.1%)
Stronger & more liquid balance sheet
Business volumes
• Capital adequacy ratio: 20.5% (Dec 10: 20.4%)
• Tier 1 capital ratio: 18.1% (Dec 10: 17.7%)
• Gross loan to deposit ratio: 66.6% (Dec10: 83.3%)
• Liquidity ratio: 68.2% (Dec10: 50.9%)
• NPL ratio: 2.6% (Dec 10: 7.8%)
• 34.3% growth in deposits to N1.9 trillion
• 9.2% growth in net loans and advances to N1.2 trillion; adjusted growth of 40.6%
• No of business locations: 717; ATMs: 1,538
• Number of staff: Group – 8,426; Bank – 7,801
• Number of customer accounts: 7.7 million (Dec 10: 6.3 million)
• Number of cards: 4.3 million (Dec 10: 1.5 million); 76% card activity rate (2010: 48%)
Full Year 2011: Solid results despite challenging environment O
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Evolution of full year group profit after tax (N’bn)
(a) Includes provision for diminution in value of investments and doubtful receivables (b) Estimated
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
220.4
50.1 44.8
(37.0)
75.8
(32.9)
(11.9)
(15.5) (1.5)
(147.4) (5.3)
Interest income Interest expense Non-interest income
Loan loss provision Provision for other losses (a)
Exceptional item Share of associates results
Operating expenses
Profit before taxation
Tax Profit after tax
[]December 2010
[56.5]
[175.6]
[(53.9)]
[(22.4)]
[(0.8)]
[0.2][(3.7)]
[(119.3)]
[33.8][4.6]
[29.2]
176 47 107 161 220
57
16
33
50
76
FY'10 Q1'11 H1'11 9m'11 FY'11
Interest Income Non Interest Income
9
Significant improvements in revenue generation capabilities, resulting in relatively higher run rates…
Gross earnings N’bn
26%
74%
24%
76%
26%
74%
23%
77%
N296
N232
N63
N140
N211
24%
76%
Gross earnings split by business lines – FY 2011
Comments
Retail & Corporate Banking 95.1% (Dec 10: 95.1%) (a)
Investment & Capital Markets 2.2% (Dec 10: 3.2%) (b)
Asset Management 0.6% (Dec 10: 0.2%) (c)
Mortgage Banking 0.9% (Dec 10: 0.4%) (d)
Other 1.1% (Dec 10: 1.1%) (e)
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N296.3 bn
(a) First Bank of Nigeria & FBN UK (b) FBN Capital & First Registrars’ (c) First Trustees (d) FBN Mortgages (e) FBN Life Assurance, FBN Insurance Brokers, First Pension Custodians, FBN Microfinance Bank & First Funds
• Gross earnings benefiting from expansion in both interest and non interest income
• Interest income benefitting from deliberate shift towards higher yielding assets
• Steady contribution from non-interest income
• Non-interest income benefitting from improved efficiency, improved customer service & delivery, innovative products & solutions to clients
• Focus is on driving contribution from subsidiaries by improving group synergies and cross selling
• Revenue growth to benefit from mobile banking and the CBN cashless policy, cross selling and focus on non interest revenue
27.2% 27.3% 26.7% 26.6% 24.3%
10.9% 10.6% 11.2% 11.8% 16.4%3.3% 7.0% 3.8% 5.1% 3.8%
30.4% 22.9% 27.9% 26.2%33.4%
5.1%4.8% 5.7% 6.6%
7.5%20.2% 23.4% 21.6% 20.4%
11.7%2.9% 4.1% 3.1% 3.2% 2.9%
FY'10 Q1'11 H1'11 9m'10 FY'11
Commission on Insurance and western union transfersOther income (a)
Letters of credit commissions and fees Other fees and commissions (b)
Remittance fees /Management feesCredit related fees
Commission on turnover (COT)12.8% 10.6% 9.4% 10.4% 9.2%
23.8%19.1% 16.9% 17.5% 19.0%
63.4%70.3% 73.6% 72.1% 71.8%
FY'10 Q1'11 H1'11 9m'11 FY'11
Placements Treasury bills & investment securities Loans and advances N16
10
...driven by growing business volumes, customer acquisition, rising yields and margin expansion.
Interest income mix Non-interest revenue mix
Comments
N176 N47 N107 N161 N220
N57 N33 N50 N76
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• Interest income growth positively impacted by a higher interest rate environment leading to solid growth in income from treasury and investment securities as well as growth in income from loans and advances
• Non-interest income primarily driven by credit related fees, commissions on transactions, rising fees from letters of credit service fees, recoveries and continued benefits of improving service delivery.
• Margin expansion on the back of improving yield on interest earning assets and stable cost of interest bearing liabilities
• Rebalancing of earning assets to optimise yields further
• High interest rate environment slightly impacting cost of funds. Focus remains on low cost liability generation
(b) Exchange gains/ foreign exchange income, Gain on disposal of investment property, Financial advisory fees, Loss/(Profit) on disposal of property and equipment
(a) Investment income and recoveries
Asset yield and cost of liabilities
122 38 88 129 183
6.1%6.9%
7.4% 7.1%8.0%
8.8% 8.6%9.0% 8.9%
9.6%
3.2%
2.0% 1.8% 2.0%1.6%
FY'10 Q1'11 H1'11 9m'11 FY'11
Net interest income N'bn Net interest margin*
Average yield on interest earning assets Average cost of deposits
1310 16 17 331
0.30.7
1 230
614
20 3119
512
2130
7721
47 76 109
31 7 20 29 39
FY'10 Q1'11 H1'11 9m'11 FY'11
Treasury (a) Private banking Corporate bankingPublic sector Retail banking Institutional banking
52
14 37
56 59
8
2
4
7 9
51
17
26
41
73 7
1
3
4
7
FY'10 Q1'11 H1'11 9m'11 FY'11
Staff cost Depreciation Admin and general expenses NDIC Premium
11
Underlying growth in operating income driven by stronger platform
Operating income and expenditure N’bn Operating expense breakdown N’bn
CommentsOperating income breakdown by SBU N’bn (bank only)
• Strong operating income growth, on the back of rising revenues and stable funding costs
• Operating expenses impacted by one-off increases in staff costs and the recently introduced AMCON resolution cost charge; adjusting for this, on a like for like basis, operating expenses came in significantly below inflation at 8.0%
• Admin and general expenses largely impacted by AMCON resolution cost charge as well a branch and ATM expansion
• Expanded footprint with 21 new business locations, 111 additional ATMs and 2,411 Point of Sales (POS) terminals, bringing total business locations, ATMs and POS terminals to 738, 1,649 and 5,122 respectively as at March 2012
• YTD increase in the number of customer accounts by 300,000 to over 8 million, grown the number of cards issued by 900,000 to 5.2 million, with the card activity rate also improving to 80% from 76% as at Dec 2011
N119
N34
N71
N107
N147
6%
43%
7%
44%4%48%6%41%
4%
37%
6%
53%
4%
38%
6%
52%
4%
49%
6%
40%
N161 N49 N110 N164 N245
19%
48%
12%
8%
42%
13%
11%
13%
18%
42%
11%
13%
18%
46%
13%
1%
45%
13%
13%
12%1%
1%
20%1%
15%
13%
10%
1%
16%
12%
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(a) Treasury is not a strategic business unit but contributes to the operating income
178 54 121 180 259 119 34 71 107 147
FY'10 Q1'11 H1'11 9m'11 FY'11
Operating income Operating expenses
68.0
22.8
11.4
44.1
(88.3)
12.4
1-Jan-11 Additional provision Amounts written off 30-Dec-11
22.4
4.0
13.7 18.7
32.9
(0.8) (0.2)
0.6
4.9
11.9
FY'10 Q1'11 H1'11 9m'11 FY'11
Loan loss provision Provisions for other losses
12
Focused on sustaining efficiency improvements
Provision for credit losses (N’bn) Cost to income ratio
CommentsMovement in loan loss provision* (N’bn)
• Total provision for losses of N44.8 billion made up of N32.9 billion credit losses, N8.3 billion diminution in value of equity and fixed income securities and N3.7 billion other losses.
• Provisions for credit losses relate to delinquencies that occurred in the course of the financial year and our prudent approach on the loan portfolio in line with our risk management practices
• Visible progress from our transformation agenda; 89% ATM migration rate, up from 50% in Dec 2010; 300% growth in e-product signup in branded branches; 15% reduction in our cost to serve as we grow volumes faster than operating expense; over N1 billion in annual savings expected from our centralised processing center and branch process engineering
• Steps to reducing our costs include centralised processing of our back-office branch processes, reducing turnaround time and driving increased volumes
N21.6
N3.8
N14.4
N23.5
N44.8Ove
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N97.4
*includes interest in suspense and provision against leases
N35.2
x General provision
67%
64%
59%60%
57%
FY'10 Q1'11 H1'11 9m'11 FY'11
13
Improved performance in line with growth in profitability
54%
48%
Profit (N’bn)
Retail & Corporate Banking 102.8% (Dec 10: 80.4%) (a)
Investment & Capital Markets 5.0% (Dec 10: 8.0%) (b)Asset Management -8.8% (Dec 10: 8.6%) (c)
Mortgage Banking 2.3% (Dec 10: 0.2%) (d)
Other -1.3% (Dec 10: 2.9%) (e)
FY 2011 PBT split by business lines
Comments
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N50.1 bn
(a) First Bank of Nigeria & FBN UK (b) FBN Capital & First Registrars’ (c) First Trustees (d) FBN Mortgages (e) FBN Life Assurance, FBN Insurance Brokers, First Pension Custodians, FBN Microfinance Bank & First Funds
• Full year growth in profit before tax driven by:
• solid income growth
• reduction in run rates in operating expenses, and
• migrating customers to alternative channels
• Full year profits impacted by an exceptional charge of N15.5 billion.
• Haircut due to sale of eligible bank assets to AMCON worth N176.3 billion, with a net value of N148.8 billion, in exchange for bonds worth N189.4 billion with a discounted value of N133.3billion
FY'10 Q1'11 H1'11 9m'11 FY'11
PBT PAT
14
Improving shareholder returns in line with operational progress
Return on average equity Return on average assets
Dividend
3.32
1.97 1.84
0.51
0.17
0.95
1.40
1 11.2
1.35
0.1
0.6 0.8
10%
5%
4%
11%
1%
4%
9%
Mar-06 Mar-07 Mar-08 Mar-09 Dec-09 Dec-10 Dec-11(c)
EPS (N) DPS (N) Dividend yield(b)
(b) Share price as at 31st December (c)Proposed dividend
(a)Interim numbers do not include unappropriated profit during the year but the full year numbers reflect capitalised profits for the year
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341 341 321 322 365
10.3%
15.46%
19.8%18.1%
13.0%
FY'10 Q1'11 H1'11 9m'11 FY'11
Shareholders' funds N'bn After-tax ROAE (a)
2,305 2,496 2,913 2,861 2,839
1.5%
2.1%
2.4%
2.2%
1.8%
FY'10 Q1'11 H1'11 9m'11 FY'11
Total assets N'bn After-tax ROAA
42% 43% 42% 39% 38%
27% 27% 25%24% 25%
19% 18%17%
17% 15%
12% 12% 16% 19% 21%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Current accounts Savings accounts Term deposits Domiciliary accounts
63% 63% 66% 70% 69%
15% 14% 11%11% 13%
6% 10% 11% 5% 6%5% 5% 4% 4% 3%11% 9% 8% 10% 9%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Deposits Equity Due to other banks Other borrowing Other liabilities
1,331 1,388 1,666 1,786 1,784
120 195
254 225 164
-3% 4%
20%
7%
0%
-6%
9%
21%
5%
-3%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Bank Subsidiaries Bank growth rate Group growth rate
15
Sustained growth and improvement in balance sheet efficiency on the back of low cost funding
Balance sheet structure as at Dec 2011 (N’bn) Funding mix (N’bn)
Deposits mix by type (N’bn)Deposits (N’bn)
N1,450 N1,582 N1,920 N2,011 N1,948
177
276
388
609
191
284
432
675
315
342
476
804
418
288
496
747
386
352
486
786
N1,451N1,582
N1,920N2,011
N1,948
N2,305 N2,496 N2,913 N2,861 N2,839Ove
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40
1,948
18293
211
Liabilities
604
187
1,240
587
57164
Assets
Other Liabilities 7% [5%]
Deposits 69% [63%]
Short Term Liabilities 1% [4%]
Capital & Reserves 13% [15%]
Other Assets 6% [5%]Ppty & Equipment 2% [2%]
Investments 21% [15%]
Net Loans & Advances 44%[49%]
Treasury Bills 7% [1%]
Inter Bank & Cash 21%[27%]
N2,839 N2,839
[]December 2010
697 755 800 860 885
23 1919 20 15
95 101113 125 119
308 313426 498 520
34 1328
28 19174 186 298 253 233
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Retail banking Private banking Corporate banking
Public sector Treasury (a) Institutional banking
16
Large portion of the deposit liabilities are core thus providing stable funding for the business
Deposits by SBU N’bn (bank only) Comments
Balance sheet efficiency
• Full year deposit growth driven by current and savings accounts in both local and foreign currency
• Approximately 62% of total deposits are core1
• Our products are geared towards driving growth in low cost deposits
N1,388 N1,684N1,321
13%
3%
23%
7%2%
52%
13%1%
23%
7%1%
54%
18%
2%
25%
7%1%
48%
14%
2%
28%
7%
48%
1%
N1,786
13%1%
29%
7%
50%
1%
N1,784
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1Deposits with the Bank for more than 2 years
(a) Treasury is not a strategic business unit but contributes to deposits
6.8 7.3 9.1 8.9 7.8
83.8% 85.4%
67.0% 66.7% 65.5%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Leverage ratio (times) Gross loans to deposit ratio
332 335 315 315 358
45 5049 44
46
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Tier 1 Capital Tier 2 Capital
55% 55%45% 48% 50%
1% 1%
2%5% 7%
25% 21%30% 22% 16%
1%0% 3% 4% 4%
16% 21% 19% 19% 23%
2% 1% 1% 1% 0%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11
Loans and advances Treasury bills Due from other banks
Reserve deposits with CBN Investments (a) Managed funds
17
Capital and liquidity levels provide solid foundation for asset growth
Earning assets mix (N’bn) Evolution of capital and liquidity ratios
Components of capital (N’bn)
(a) securities, subsidiaries/associates, property
N2,569N2,196 N2,446 N2,853 N2,796
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1,870 1,856 1,956 2,049 1,980
17.8% 16.8%14.9% 15.4%
18.1%
20.2% 19.3%17.3% 17.5%
20.4%
64.9%
32.1%
38.3% 39.3%
68.2%
55.4%
42.1%
50.4% 50.1%
61.0%
FY'10 Q1'11 H1'11 9m'11 FY'11
Total RWA (N'bn) Tier 1 capital ratio
Total capital adequacy ratio Liquidity ratio (Group)
Liquidity ratio (Bank)
Review of first quarter 2012 IFRS compliant results
19
1Annualised
Q1 2012: Continued positive momentum to deliver strong results - IFRS
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
Earnings
Profitability
• 42.5% growth in gross earnings to N92.3 billion (Q1 2011: N64.8 billion)
• 50.2% growth in operating income to N74.2 billion (Q1 2011: N49.4 billion)
• Non-interest income contribution of 21% (Q1 2011: 25%)
• 101.6% growth in profit before tax to N28.9bn (Q1 2011: N14.3bn)
• Cost to income ratio: 60.9% (Q1 2011: 70.3%)
• After tax ROE1: 27.0% (Q1 2011: 12.0%)
• After tax ROA1: 3.3% (Q1 2011: 1.9%)
• EPS1: N3.01 (Q1 2011: N1.49)
• Net interest margin1: 9.5% (Q1 2011: 6.7%)
Stronger & more liquid balance sheet
Business volumes
• Capital adequacy ratio: 19.9%
• Tier 1 capital ratio: 16.3%
• Gross loan to deposit ratio: 64.3% (Q1 2011: 81.0%)
• Liquidity ratio: 54.7% (Q1 2011: 57.9%)
• NPL ratio: 2.7% (Q1 2011: 7.6%)
• Deposits up 31.1% yoy to N2.1tn (Q1 2011: N1.6tn)
• Net loans and advances to customers up 4.0% yoy to N1.3tn (Q1 2011: N1.3tn)
• No of business locations: 738; ATMs: 1,649
• Number of staff: Group – 8,838; Bank – 8,132
• Number of customer accounts: 8.0mn
• Number of cards: 5.2mn (Q1 2011: 2.3mn); 80% card activity rate (Q1 2011: 60%)
20
Evolution of Q1 2012 group profit after tax (N’bn)O
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73.1
28.9
24.5
(12.7)
(5.4)
19.1
(45.2) (0.2)
4.3
Interest income Interest expense Impairment charge for credit losses
Non-interest income Operating expenses Share of associates results Profit before taxation Tax (b) Profit after tax
[48.4]
[(9.4)]
[(4.6)]
[16.4]
[(34.7)] [(0.4)]
[14.3][(2.1)]
[12.2]
42%
21
Strong earnings growth on the back of growing business volumes, increasing segment specialisation, customer acquisition, innovative product development, rising yields and margin expansion
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Gross earnings N’bn
48 73
16
19
Q1'11 Q1'12
Interest Income Non Interest Income
10%3%
19% 28%
71% 68%
Q1'11 Q1'12
Placements Treasury bills & investment securities Loans and advances
Interest income mix (N’bn)
39 60
6.7%
9.5%8.3%
10.7%
2.0% 2.1%
Q1'11 Q1'12
Net interest income N'bn Net interest margin*
Yield on interest earning assets* Cost of deposits*
Asset yield and cost of liabilities Operating income (N’bn)
25%
75%
21%
79%
34N65
N92N92 N92
9
5 2
21
50
50%
49
74
Q1'11 Q1'12*Annualised
22
Increased traction in our transformation agenda is driving improvements in our overall efficiency
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Operating expense N’bn Impairment charge for credit losses N’bn
Cost to income ratio Profit N’bn
1422
2
217
191
2
Q1'11 Q1'12
Staff cost Depreciation Admin and general expenses NDIC Premium
N356%
43%
7%
44%
N456%
43%
7%
44% 4.6
5.4
Q1'11 Q1'12
70.3%
60.9%
Q1'11 Q1'12
14
29
12
25
1.9%3.3%
12.0%
27.0%
Q1'11 Q1'12
PBT PAT ROE ROA
23
Stable funding base
Deposit mix (N’bn)
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Funding mix (N’bn)
743
1,328
662
61185
Assets
364
32
2,066
23373
210
Liabilities
Balance sheet structure as at Mar 2012 (N’bn)
Other Liabilities 7% [7%]Other Borrowings 2% [5%]Due to Other Banks 8% [9%]
Deposits 69% [62%]
Short Term Liabilities 1% [1%]Capital & Reserves 12% [16%]
Other Assets 7% [4%]Ppty & Equipment 2% [2%]
Investments 22% [22%]
Net Loans & Advances 44%[50%]
Inter Bank & Cash 25% [22%]
N2,978 N2,550
[] March 2011
Liquidity
42% 38%
27%25%
18%17%
12%20%
Mar-11 Mar-12
Current accounts Savings accounts Term deposits Domiciliary accounts
191
284
432
668
418
357
514
777
N1,576 N2,066
62% 69%
16%12%
9% 8%5% 2%8% 9%
Mar-11 Mar-12
Deposit from customers Equity Deposit from banks
Other borrowing Other liabilities
N2,550 N2,998
57.9%54.7%
81.0%
64.3%
Mar-11 Mar-12
Liquidity ratio Gross loan to deposits
24
Improving earning asset mix
Asset quality
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Loans and advances (N’bn)Earning asset mix (N’bn)
54% 49%
22%21%
0%5%
22% 25%
1% 0%
Mar-11 Mar-12
Managed funds
Investments (a)
Reserve deposits with CBN
Loans and advances to banks
Loans and advances to customers
N2,350 N2,692
1,112 1,153
164 174
Mar-11 Mar-12
Bank Subsidiaries
N1,276N1,328
55.80%
117.10%
7.60%
2.70%
1.40% 1.60%
Mar-11 Mar-12
NPL coverage NPL ratio Cost of risk (annualised)
25
Key adjustments of IFRS numbers to NGAAPO
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Major reconciliatory itemsNGAAP
N'millionIFRS
N'millionDifference
N'million Explanation
Interest income 64,754 73,148 (8,394)
Adjustments for Interest In Suspense (written back), Credit related fees (Now treated as EIR) and Interest subsidy on staff loans (now grossed up)
Fees and commissions 18,815 15,573 3,242 Adjustment for Credit related fees now part of EIR (contra in Interest Income)
Loan impairment provision 5,559 5,419 140
Incremental impairment charge under the IFRS model, taking cognisance of Expected Discounted Cash Flow from Impaired assets, mainly from Collateral values
Mark to market adjustment on AFS 4,309 - 4,309 MTM losses passed as an adjustment to equity under IAS 39 as required by the FRC
Operating expenses 44,760 45,151 (391)
Subsidy on staff loans included, as well as depreciation on stock of fixed assets available for use but not yet deployed
9,210
Deposits 2,064,518 2,065,505 (987)Interest Payable on Deposits now added to the deposit balance
Loans and advances 1,323,320 1,527,534 (204,214)Interest Receivable on loans not yet applied now added to Loans and Advances
26
Healthy underlying loan growth, with heightened focus on optimising the yield in the portfolio further in coming periods
1,025 1,106 1,086 1,161 1,133 1,149
110158 148
119 107178
-2%
8%
-2%
7%
-2%
1%-1%
11%
-2%
4%
-3%
7%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Bank Subsidiaries Bank growth rate Group growth rate
Net loans and advances
N1.1tn
N1.3tnN1.3tn N1.2tn N1.3tn N1.2tn
13.8% 14.2% 12.5% 14.7% 17.5% 15.6%
63.4% 62.8% 66.3% 65.7% 63.6% 68.1%
10.2% 12.7% 13.9% 14.2% 15.9% 16.4%12.7% 10.3% 7.4% 5.4% 3.0% 0.0%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Overdraft Term loans Commercial papers Money market lines
45.8%32.4%
42.9%32.6% 26.9% 27.8%
8.6%
12.8%4.1%
15.0%19.3% 15.9%
4.0%
3.5%7.6% 3.5% 4.6% 9.0%
2.8% 21.3% 3.9%4.6% 10.9% 6.0%
38.9%29.9%
41.6% 44.3%38.3% 41.3%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
0 - 30 days 1 - 3 mths 3 - 6 mths 6 - 12 mths Over 12 mths
87.6% 87.6% 86.8% 87.6%
96.3%94.5%
3.4% 1.8% 1.8% 1.9%
2.5%2.2%9.0% 10.6% 11.4% 10.5%
1.2%3.3%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
0 - 30 Days 31 - 60 Days > 61 Days
Loans and advances by type (bank only)
Loans and advances by maturity (bank only)Ageing analysis of performing loan book (bank only)
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
Consumer auto loan 1% [2%]
Residential mortgage 15%
[20%]
Personal loan 9% [4%]
Asset backed - retail 1% [2%]
Co-operatives 13% [6%]
Asset backed -consumer 61%
[66%]
27
Well diversified loan book, driven by growth in our corporate banking business
Breakdown of gross loans by SBU (N’bn) (bank only) Comments
Core consumer/retail product portfolio1Gross loans and advances (sector exposure) Mar 2012 (bank only)
682 665 597 646 548 560
205229 222 250
213 211
71100 120 109
119 133
170 226 229 246 277 270
5 10
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Institutional banking Retail banking Public sector (a)
Corporate banking Private banking
Manufacturing 12% [8%]
General commerce 8% [8%]
Information and communication 6%
[6%]
Finance and insurance 3% [19%]
Residential mortgage 2% [3%]
Real estate -commercial 2% [2%]
Real estate - home developers 2% [5%]
Capital market 1% [2%]Oil & gas
upstream 7% [0%]
Oil & gas downstream 10% [21%]
Oil & gas services 5%
[13%]
Government 9% [6%] (b)
Consumer 8% [6%]
General 14% [13%] (c)
(c) General includes: hotels& leisure, logistics, religious bodies, agriculture, construction, power & energy and transportation(b) Government exposures: federal, state and local governments
1Core consumer/retail portfolio represents retail loan exposures <N50mn
(a) Public sector exposures: federal and state governments
[]December 11
• Net loan book growth of 9.2% to N1.2 trillion for the full year
• Adjusting for N147 billion swapped in money market lines within our loan book for higher yielding customer loans as well as sales to AMCON, underlying growth in customer loans was 40.6%
• Increasing proportion of obligors have been rated; improving overall quality of loan book
• Performing accounts are closely monitored by independent control units
• Focus on delivering solutions for our customers and driving growth in our loan book as a result
• Loan book growth to be driven by the oil & gas, infrastructure, trade and general commerce sectors
N1.1tn N1.2tn N1.2tn N1.3tn N1.2tn N1.2tnOve
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N192.2 bnN1.2 tn
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Significant improvement in asset quality on better monitoring and benefits from more aggressive management
Asset quality NPL sector exposure Mar 2012 (bank only)
NPL ratio within each SBU (bank only)NPLs by SBU N’bn (bank only)
94 99 49 64 34 37
84.2% 87.8%
104.9%95.9%
104.6%113.2%
7.8% 7.3% 3.8% 4.7% 2.6% 2.7%
2.4% 1.3% 2.3% 2.0% 2.6% 2.0%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
NPL N'bn NPL coverageNPL ratio Cost of risk (annualised)
Agriculture 7% [8%]
Finance and insurance 0.2% [0.1%]
General commerce 4% [3%]
Information and communication 0.4%
[0.2%]
Real estate-home developers 0% [0%]
Residential mortgage 15% [16%]
Real estate-commercial 0% [0%]
Capital market 1% [0%]Oil & gas services
23% [22%]
Oil - downstream 4% [8%]
General 24% [28%] (a)
Consumer 21% [13%]
(b) General includes: hotels& leisure, logistics, religious bodies, manufacturing, construction, government and transportation
15 15 10 16 9 8
3326
56 0 0
0.11
00 0
3
4452
34 40 28 20
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Corporate banking Institutional banking Public sector Retail banking
8.6% 6.4% 4.2%6.3% 3.1% 3.1%
6.4%5.7%
1.1%1.4%
0.1%0.1%
0.1%1.5%
0.0%0.1%
0.0% 2.0%
22.7% 23.6%16.5%
17.0% 8.9%9.6%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
Corporate banking Institutional banking Public sector Retail banking
8.3% 8.1% 4.3% 5.1%96 4991
48%
0%
36%
16%
54%
1%
29%
15%
69%
0%11%
20%
65%
0%10%
25%
63
67%
0%2%
31%
28
64%
8%1%
26%
32 2.4% 2.7%
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N31.6 bn
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29
Our focus is on recoveries
Ageing analysis of NPL portfolio (bank only) Comments
Sector NPL ratio’s (bank only)
34.5% 28.8%
47.4%39.1%
32.0% 27.3%
33.1%30.4%
5.0%
4.1% 23.9%
16.5%
32.4%40.8%
47.6%56.9%
44.0%56.2%
Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12
90 - 179 days 180 - 359 days above 360 days • Asset quality improvement driven by a combination of NPL sales to AMCON and N43.4 billion in write-offs
• We will focus on recoveries over coming periods
• We have defined a 6% NPL ratio as an acceptable ceiling by 2013, taking into account our intention to add loans in the consumer/retail, corporate and SME segments
• We continue to review our credit policy to ensure high quality new loans are being underwritten while also ensuring early warning signs of deterioration are promptly highlighted and remedial action is set in motion
• Deterioration in portfolio quality is proactively highlighted for appropriate remedial action as a result of institutionalised bank wide multi level Criticised Assets Committee model
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*General includes: hotels & leisure, logistics and religious bodies
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Sector NPL ratio’s (bank only)
10.6%
4.1%
5.9% 6.1%
0.0%
2.2%
0.7%1.2%
2.1%
0.1% 0.1% 0.1% 0.2%
8.3%
6.3%5.9% 5.8%
2.8%2.3%
1.5% 1.4%1.1%
0.3% 0.2% 0.1% 0.1%
Agriculture Consumer Real estate activities
General* Capital market Oil & gas Transportation and storage
General commerce
Construction Finance and insurance
Information and communication
Government Manufacturing
Dec-11 Mar-12
8.9%
2.3%
8.9% 6.7%
% of gross loans as at
Mar-12
1.0%0.5%
1.3%
1.7%6.3%
9.4%6.1% 13.1%
31.7%
30
Effective risk management framework
Board of Directors
Internal Audit
GMD/MANCO2
Board Audit and Risk
Assessment
GMD/MCC1
Board Credit Committee
ED/CRO 3
1 Group Managing Director/Management Credit Committee2 Group Managing Director/Management Committee3 Executive Director/ Chief Risk Officer
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FirstBank, a diversified financial services group
FirstBank Group Holding Company (HoldCo) Structure Holdco Structure Implementation Update
FirstBankFirstBank
FBN Holdings
FBN CapitalFBN
Capital
FBN Insurance Brokers
FBN Insurance Brokers
FBN Life AssuranceFBN Life
Assurance
FBN Micro-finance
FBN Micro-finance
First Registrars
First Registrars
FBN Mortgages
FBN Mortgages
FBN Bureau de
Change
FBN Bureau de
Change
BICBIC
FBN Bank UK
FBN Bank UK
First Pension
Custodian
First Pension
Custodian
FBN Securities
FBN Securities
First FundsFirst Funds
First Trustees
First Trustees
• Secured CBN approval to implement our compliance plan in respect of non-banking businesses and HoldCo
• HoldCo (FBN Holdings) will be a non-operating legal entity domiciled in Nigeria and regulated by the CBN
• FirstBank will continue to focus on the core banking business and will retain FBN UK, FBN Bureau de Change, First Pension Custodian, and BanqueInternationale de Credit (BIC) as its subsidiaries
• FBN Capital will be the primary vehicle of our Investment Banking and Asset Management (IBAM) business
• First Registrars is in the process of being divested in compliance with the new regulation
• FBN Mortgages will divest its equity investments in real estate in accordance with CBN rules and the mortgage activities will be transferred to the Bank
• The restructuring will be implemented by means of a Scheme of Arrangement scheduled for H2 2012
• FirstBank will be delisted from the All Share Index and FBN Holdings will become the listed entity
© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
32
The FirstBank Group aspires to be Sub-Saharan Africa’s leading diversified Financial Services Provider
Group Strategic PrioritiesNotable Achievements Across Subsidiaries In 2011
1. Restructuring for Growth• Develop a stronger platform for achieving our business
objectives• Improve coordination and specialisation by clustering
similar businesses while ensuring an optimal legal framework, strict regulatory compliance and tax efficiency
• At the Bank level, drive increased segment specialization across the organisation
2. Business Line Expansion• Focus on driving growth in investment banking and asset
management business and insurance, given strong profit potential and very strong synergies with commercial banking
• Focus on the customer – acquiring new customers along priority segments (i.e. Emerging Corporates, Affluent retail, and the Unbanked), growing customer profitability, and leveraging our enhanced operations platform to offer better service.
3. International Expansion• Extend our banking franchise and raise the Bank’s
profile beyond its current borders, establishing presence in priority Sub-Saharan African countries
4. Synergies and Cross Selling• Active efforts by the Bank’s businesses to collaborate for
joint growth e.g. Public Sector and IBAM, Private Banking with FBN UK and IBAM.
5. Sequencing Growth Systematically• Disciplined and staged approach to growth across
dimensions mentioned above
FBN Capital
§ Grew AUM by 24% YoY by increased focus on FI§ Appointed Lead Trustee to major state Bond§ Won several mandates with issuing and
investment houses, including IFC Bond issue§ Launched research business to enhance market
credibility and profile across institutional investors§ Held first annual Investors Conference
FBN Bank UK
FBN Life Assurance
First Pension Custodian
§ Regained previously lost Structured Trade Commodity Finance (STCF) business
§ Scope of STCF book expanded to include cotton and tea
§ Private Banking desk expansion commenced and ongoing
§ Significant growth in Short Term trade assets
§ Revenue of over N1 billion in first full year of operations, with over 90% in premium income
§ Implementing banc assurance model through suite of retail products
§ Maintained industry leadership with 37% market share of industry assets under custody
§ Deepened penetration in money market and fixed-income business through appointment by AMCON to provide custodial services
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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012
33
The Bank has defined its imperatives for the 2011 – 2013 cycle in both financial and non-financial terms
PRIMARY STRATEGIC OBJECTIVES• Deliver superior shareholder value via an aggressive focus on growth and profit maximization• Expand the Bank’s leadership into other dimensions – customer satisfaction and value, employee desirability, capital efficiency• Position the bank for sustained dominance in a complex and rapidly evolving market
FINANCIAL PRIORITIES NON-FINANCIAL PRIORITIES
Increase revenue from non-interest income sources
1. Fees and commissions Increase
2. Selective LAD creation
3. Pricing optimisation
4. Low-cost deposit Liabilities growth
5. OPEX containment
Adjust mix towards assets with higher (risk adjusted) total yield
Implement strong risk-based pricing regime, Manage revenue ‘leakages’
Targeted savings promotions, product innovations for priority segments, branch expansion
Migrate retail mass market clients to alt. channels, rationalize unprofitable branches
Channel shift campaigns, brand health campaigns1. Brand Transformation
2. Service Excellence
3. Credit Processes Excellence
4. Performance Management
5. Talent Management
Fast and friendly service, without sacrificing processing quality
Improve effectiveness of end-to-end credit process from origination to recovery
Align individual incentives with enterprise/shareholder priorities
Capability building in critical areas, HR alignment with differing BU needs
1) Pre-tax return on equity and pre-tax return on assets
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ROA1 3%
ROE1
Total Assets
25%
# 1
C/I Ratio
NPL
55%
≤ 6%
Service Levels Top 5
2013 STRATEGIC TARGETS
34
Each market facing unit has a number of important drivers that will be integral to attaining our objectives
*High Net-worth Individuals
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HNI*FederalGovernment
IndividualsBusiness Government
Affluent
Mass MarketLocalGovernment
Institutional Clients
SME
StateGovernment
Corporate Clients
Institutional Banking• Ensure linkage of lending to
transaction banking / fee sources (e.g., cash mgt, trade finance, risk products)
• Leverage value chains of institutional clients
• Deepen capabilities for growth sectors (e.g. Power and Infrastructure)
• Grow lending in right portfolio mix/concentration
Private Banking• Drive customer acquisition and contribution to
FirstBank group with defined referral management system and Group cross-sell incentives
• Drive transaction and fee income via investment products/AUM and interest income via credit cards and mortgages (onshore/offshore)
Public Sector• Target revenue/expenditure
accounts (e.g., FAAC) in wealthiest states and business in key MDAs
• Drive value-added services (e.g., collections, payment services)
• Optimize lending within regulatory limits and extend via PPP participation and other Group offerings
Corporate Banking• Manage risk with large clients
and drive fee income through payments, account turnover, trade finance etc
• Grow small ticket lending at right price to large number of corporate customers
• Establish strong acquisition pipeline for new/referred corporate customers
Retail• Continue to generate low cost
stable funding via CASA deposit mobilization
• Make significant strides in acquiring affluent and small business customers as well as youth
• Expand consumer and small business credit (secured lending, cards)
35
Retail banking group: strategy and performance overview
§ Strong LAD growth (36%) as a result of improvements to consumer and SME credit capability
§ 22% growth in deposits as a result of increased branch density and customer access to FBN locations
§ PoS deployment growth; 2,400+ at Dec 2011, a 143% increase
§ Strong growth in fees & commission income (98% growth between Q1 and Q4) due to re-pricing initiatives and recovery (AMCON)
2011: Performance Review
2011 – 2013: Priority Initiatives
§ Increase Market share of customers in the Youth, Affluent, Diaspora and SME segments
§ Increase branch density and customer access to FBN locations
§ Migrate transactions to alternative channels (ATMs, PoS, internet, mobile)
§ Improve consumer and SME credit capability
§ Deploy mobile payment/money offering
§ Customer Analytics to enable cross-selling in affluent and SME segments
1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations
LocalGovt
Affluent
Mass MarketSME
Retail Banking Group
885
213 109
Deposits LAD Net Revenues
Key 2011 Financials1
(N’bn)
2012: Key Focus Areas
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• Aggressively migrate sizeable number of mass-market customers to alternative channels and grow the segment in a cost-effective manner.
• Expand retail distribution network with deployment of 100+ branches and Quick Service Points
• Intensify focus in understanding behavior and preferences of customers in the affluent, youth, mass SME and diaspora segments and develop or improve on the range of services/products that best suit their needs.
• Aggressively increase PoS terminal install base
• Introduce new sales model to market and serve Retail customers
45%18%
50%
% of totals
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Private banking group: strategy and performance overview
• Retained 100% of account inherited from other parts of the Group in addition to winning mandates for 50+ new accounts
• Developed partnership model with IBAM and FBN UK to streamline cross-sell and maximize opportunities
• Strong AUM growth with 47% increase in 9 months ended December 2011
15
5
2
Deposits LAD Net Revenues
2011 – 2013: Priority Initiatives
Key 2011 Financials1
(N’bn)
• Execute specific market entry initiatives to drive risk assets creation and deposit mobilization
• Introduce premium credit card products
• Offer market leading rates on term deposit products
• Offer competitive fees for investment/asset management transactions
• Develop and implement a bank-wide referral management system
Private Banking Group 2011: Performance Review
2012: Key Focus Areas
1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations
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• Grow AUM volumes by offering a range of high-yielding onshore and offshore investments
• Harness multiplier effect from investment-based transaction to grow Net Revenues.
• Reduction of costs while maintaining desirably high service levels
• Implement Global Private Banking model to ccoordinate activities of private banking businesses across geographies (i.e. Nigeria, UK).
1%
1%
1%
% of totals
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Corporate banking group: strategy and performance overview
• 25% YoY growth in low-cost deposits, primarily bolstered by domiciliary accounts growth of 92% YoY
• Impressive asset creation traction with LAD growth of 56%, broadening existing revenue base
• Higher income contribution from transactional products i.e. trade finance and LCs
• Service delivery gains attained; KPMG rank is now 6th, up from 10th
2011 – 2013: Priority Initiatives
• Aggressively growing existing customer business and controlling a greater wallet share
• Reducing concentration risk through the deliberate focus on the lower-middle customer segment and increasing the number of customers significantly;
• Adopting the value chain approach to deepen, interlock and wrap around customers’ businesses.
• Migrating cash management services of our customers to alternative channels
2011: Performance Review
2012: Key Focus Areas
Corporate Banking Group
119
277
31
Deposits LAD Net Revenues
Key 2011 Financials1
(N’bn)
1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations
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• Improve service to the identified gap in the lower end of the SBU (Emerging corporates business segment)
• Conscious focus on low cost demand deposit by trapping transaction flows
• Increase emphasis on fee-based transaction volumes
• Drive LAD volumes in Non-Oil export, infrastructure financing, trade transactions and project financing
• Increase base of Agric. facilities by exploring opportunities in Agric. and Agro-allied industries, especially given the recently launched transformational programs in the sector
13%
23%
7%
% of totals
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Institutional banking group: strategy and performance overview
§ Considerably improved share of wallet from key accounts across multiple industries
§ Net Interest income boosted by re-pricing of risk assets
§ 35% growth in deposits, driven by 178% growth in domiciliary deposits
§ LAD growth of 27%, fuelled by 81% growth in CPs for trade finance and steady growth in upstream Oil & Gas portfolio
§ Lower yielding term loans now represent 55% of the overall asset portfolio and witnessed flat growth
2011 – 2013: Priority Initiatives
• Acquire new large corporates/multinational clients in the following sectors: Energy Upstream, Conglomerates, Transportation and Infrastructure
• Deepen share of wallet of existing Manufacturing, Financial Institutions and Telecoms clients
• Exploit existing opportunities across the value chains of Telecoms and Manufacturing clients
• Leverage FBN Capital to boost cross-selling for fees generation
2011: Performance Review
2012: Key Focus Areas
Institutional Banking Group
233
548
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Deposits LAD Net Revenues
Key 2011 Financials1
(N’bn)
1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations
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§ Achieve optimal utilization of approved credit lines
§ Focus on trade business in downstream sector, participate actively in upcoming marginal fields bid, finance CAPEX of customers
§ Optimal pricing of assets and liabilities, hedging deals, access to cheaper funding for lending
§ Explore cross selling opportunities with IBAM to develop appropriate structured/project finance solutions for clients
§ Partner with E-Business to aggressively market e-business solutions to key customers across the IBG segments e.g. POS & Web Payments
16%
47%
13%
% of totals
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Public sector group: strategy and performance overview
• Secured #1 spot in public sector banking nationally
• Significantly increased cash collection mandates for fee collection in various tertiary institutions across the nation
• Signed FAAC accounts for key South-South and South-West states
• Successfully issuance of state bond for key middle-belt state in partnership with IBAM
• Improved project/infrastructural financing & PPP lending offering with signing of economic development MOU with SW state
2011 – 2013: Priority Initiatives
§ Sign on FAAC accounts in 10 priority states with the highest Revenue and Budget allocations
§ Expand cash management offering to educational/tertiary institutions
§ Develop Project Infrastructure financing for states and increase PPP lending
§ Increase depth and breadth of top ten percent of Federal Government institutions and major state institutions
§ Create a customer service orientation to focus on constantly improving customer satisfaction and measure performance
2011: Performance Review
2012: Key Focus Areas
Public Sector Group
520
11930
Deposits LAD Net Revenues
Key 2011 Financials1
(N’bn)
1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations
Fed Govt
State Govt
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• Attain customer growth by focusing on new frontier states and specific MDA’s who are not presently on our books
• Skew Deposit mix to reflect more current accounts while using competitive pricing to drive assets
• Fine-tune our customer engagement model to increase attractiveness to Foreign missions
• Ensure repayment deadline are met on all facilities
• Continue to explore cross selling opportunities with IBAM to win bond issuance mandates of State willing to access capital market to support their infrastructural and other developmental programs/projects
12%
10%
29%% of
totals
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Initiatives executed by our strategic resource functions have contributed to business unit performance
Progress UpdateBRAND
TRANSFORMATION
SERVICE EXCELLENCE
CREDIT PROCESS EXCELLENCE
TALENT MANAGEMENT
PERFORMANCE MANAGEMENT
NO
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NC
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• Service Excellence
• Channel optimization and migration – over 85% channel migration rate, up from 50% in 2010; 150%+ growth in monthly ATM transactions; Over 4.3 mln cards issued with over 72% of retail accounts with cards; secured mobile money license
• Centralized processing - ~ N1 billion in annual savings expected at steady state; 450 branches migrated to at least one CPC process and at least 60% reduction in turnaround time for account opening, retail loan processing, and third party payments
• Branch transformation – 300% growth in e-product signup at branded branches
• Customer experience/issue resolution – Over 80,000 calls in Q4 alone
• Operational Excellence
• Cost to Income ratio down 10%
• 15% decline in cost to serve driven by higher transaction volume growth relative to growth in OPEX
• Brand transformation
• Launched successful “Did You Know..” campaign
• Notable Recognition: Most Innovative Bank in Africa, Africa Banker Awards, Best Bank in Trade Finance in Nigeria, Best Bank in Foreign Exchange in Nigeria –Global Finance Awards
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FirstBank: Well positioned to consolidate its leadership position in the industry
Positioned for growth and improved efficiency within promising and thriving macro- economic environment
Improving and sustainable funding base and performance
Unique ability to support good market opportunities
Resilient asset qualitysupported by an sound risk management framework
Attractive investment proposition
• 83% of total liability funding is derived from relatively low-cost and stable customer deposits
• 14% market share of customer deposits, largest in the industry
• Improving service quality and delivery
• Liquidity ratio well above regulatory requirement
• Continued growth in loan book
• Well capitalised to leverage opportunities
• Robust risk management framework
• Diversified and well managed loan portfolio within strict portfolio concentration limits
• One of the lowest NPLs in the industry
• Accelerated earnings and margin expansion
• Improving returns to shareholders, driven by better efficiency and superior operating model
• Track record of sustained business growth and profitability
• Currently trading at a significant discount, making for a compelling value proposition
• focused on shareholder value creation
In coming periods, we will defend our current leadership, extend leadership to profitability, capital efficiency and effectiveness, attain
leadership in each SBU and extend franchise into SSA and balance short-term performance with investments for long-term growth
• Robust corporate governance framework with strong management team
• Good brand recognition, wide accessibility, innovative product development , strong customer
acquisition and loyalty driving increasing market share across several dimensions
• Clear industry leader with about 14% of total industry assets and 16% of loans and advances
• On-going transformation driving significant improvement in the business model, geared to build
sustainable and accelerating income streams
• Strong opportunities to enhance revenue growth – mobile banking, cashless policy, etc
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Contact details
Head, Investor RelationsOluyemisi Lanre-Phillips
Email: [email protected]: +234 (1) 9052720
Investor Relations [email protected]
Phone: +234 (1) 9051146-7
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