First Bank of Nigeria Full Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors
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First Bank of Nigeria Full Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors

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First Bank of Nigeria Full Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors First Bank of Nigeria Full Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors Presentation Transcript

  • First Bank of NigeriaFull Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors
  • OutlineOverview & Operating Environmentq Speaker: Group Managing Director Bisi Onasanya (Slides 4 6)Financial Reviewq Speaker: Chief Financial Officer Bayo Adelabu (Slides 7 25)Risk Managementq Speaker: Chief Risk Officer Remi Odunlami (Slides 26 30)Strategyq Speaker: Chief Strategy Officer Onche Ugbabe (Slides 31 40)Summaryq Speaker: Group Managing Director Bisi Onasanya (Slide 41)
  • Disclaimer This presentation is based on First Bank of Nigeria Plc s ( FirstBank or the Group or the Bank ) audited results for the year ended December 31, 2011 and unaudited IFRS results for the period ended March 31, 2012. To promote comparability, during this transition to IFRS reporting from NGAAP, all results presented up to and including December 31, 2011 are prepared using NGAAP. The first quarter result for the period ended March 31, 2012 together with the 2011 comparable numbers have been shown separately using IFRS. FirstBank has obtained some information from sources it believes to be credible. Although FirstBank has taken all reasonable care to ensure that all information herein is accurate and correct, FirstBank makes no representation or warranty, express or implied, as to the accuracy, correctness or completeness of the information. In addition, some of the information in this presentation may be condensed or incomplete, and this presentation may not contain all material information in respect of FirstBank. This presentation contains forward-looking statements which reflect managements expectations regarding the group s future 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 have been used to identify the forward-looking statements. These statements reflect managements current beliefs and are based on information currently available to the Banks management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. FirstBank cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain of these risks or factors, reference should be made to the Banks continuous disclosure materials filed from time to time with the Nigerian banking regulatory authorities. The Bank disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 3
  • First Bank of Nigeria is a diversified financial services group Overview FirstBank Financial Review First Bank FBN First FBN FBN Banque First FBN Life First First FBN FBN (UK) Insurance Pension Bureau de Microfinance internationale Registrars Assurance Funds Trustees Mortgages Capital Limited Brokers Custodian Change Bank de Credit Management FBN Bank (UK) South Risk FBN China Abu Dhabi Limited Africa Securities Rep. Rep. Paris Rep. Office Office Branch Office Strategy Summary The FirstBank Group comprises 12 subsidiaries, spanning asset management, investment banking, capital markets, insurance, microfinance, private equity, mortgage and pension fund custodian services making it one of the most diversified financial conglomerates on the continent© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 4
  • 2011: Continued progress towards achieving broader strategic imperatives Very strong deposit growth Overview Accelerated earnings and margin expansion Highlights Rising non-interest income Improving efficiency levels Stronger business volumes and increasing share of the market Financial Review Rising interest rate environment Macro Stable exchange rates Considerations Management Fluctuating inflation rate Risk Higher oil prices Restructuring for growth Group Strategic Business line expansion Strategy Focus International expansion Group synergies and cross-selling Sequencing growth systematically Summary Growth and efficiency Bank Strategic Service excellence Focus Performance management Talent management© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 5
  • Improving outlook for the Nigerian economy Global Economy Oil production and price Static global economic growth in 2011, estimated at 4.0% by the IMF Overview Growth driven by developing economies $ Bonny light price Domestic production (right scale) Mbpd 4 150 The Nigerian Economy 3 According to the Nigerian Bureau of Statistics (NBS), GDP grew by 120 2 7.36% in 2011, as against 7.98% in 2010, driven largely by the non-oil 90 Financial Review sector 1 Inflation yoy declined from 12.1% in January 2011 to 10.3% as at 60 0 December 2011; bringing the average inflation rate for 2011 to 10.9% Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 (2010: 13.8%). This rose to 12.8% yoy as at March 2012 Exchange rates and foreign reserves Consistent increase in the monetary policy rate (MPR) by the CBN from Management N $ 6.5% in January 2011 to 12% as at October 2011 as a pre-emptive 160 Foreign reserves (right scale) Exchange rates 50 Risk measure to reduce inflation. MPR currently maintained at 12% 40 156 The mid-point of target official exchange rate was adjusted from 30 N150/US$1 to N155/US$1 and the band of +/-3.0% was maintained 152 20 amid pressure on the currency and by extension the external foreign 148 Strategy reserves 10 Phased removal of fuel subsidy 144 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 The Banking Industry Industry wide IFRS reporting implementation commencing from March Rates 2012 Summary Monetary policy rate Prime lending rate Interbank call rate Industry NPLs have reduced from 18% in 2009 to an estimated 9% due % T-bills Inflation to the purchase of NPLs of about N3.14 trillion from the banking 20 industry by AMCON; freeing up balance sheets for stronger credit 15 growth 10 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 5 Mobile banking licenses granted to a number of banks 0 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Source: CBN, NBS© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 6
  • Full Year 2011: Solid results despite challenging environment Overview 27.6% growth in gross earnings to N296.3 billion (2010: N232.1 billion) Earnings 45.6% growth in operating income to N259.2 billion (2010: N178.1billion) Non-interest income contribution of 25.6% (Dec10: 24.3%) Financial Review 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%) Profitability After tax ROAE: 13.0% (Dec10: 9.6%) Management After tax ROAA: 1.8% (Dec 10: 1.4%) Risk EPS: N1.40 (Dec 10: N0.95) Net interest margin: 8.0% (Dec 10: 6.1%) Capital adequacy ratio: 20.5% (Dec 10: 20.4%) Strategy Tier 1 capital ratio: 18.1% (Dec 10: 17.7%) Stronger & more liquid balance sheet 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%) Summary 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% Business volumes 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%)© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 7
  • Evolution of full year group profit after tax (N bn) Overview 75.8 [56.5] Financial Review [(22.4)] 220.4 (32.9) [(0.8)] [175.6] (11.9) [0.2] [(3.7)] [(53.9)] (15.5) (1.5) Management (37.0) Risk Strategy Summary [(119.3)] 50.1 44.8 (147.4) [4.6] [33.8] (5.3) [29.2] Interest income Interest expense Non-interest Loan loss provision Provision for other Exceptional item Share of associates Operating Profit before Tax Profit after tax income losses (a) results expenses taxation []December 2010 (a) Includes provision for diminution in value of investments and doubtful receivables (b) Estimated© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 8
  • Significant improvements in revenue generation capabilities, resulting in relatively higher run rates Gross earnings N bn Gross earnings split by business lines FY 2011 Overview Interest Income Non Interest Income Retail & Corporate Banking 95.1% (Dec 10: 95.1%) (a) N296 Investment & Capital N232 Markets 2.2% (Dec 10: 3.2%) 76 26% N211 Financial (b) Review 57 24% Asset Management 0.6% 50 24% (Dec 10: 0.2%) (c) N140 N296.3 bn 33 23% Mortgage Banking 0.9% (Dec 10: 0.4%) (d) N63 Management 16 26% Other 1.1% (Dec 10: 1.1%) Risk 176 76% 47 74% 107 77% 161 76% 220 74% (e) FY10 Q111 H111 9m11 FY11 Comments Strategy 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 Summary 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 (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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 9
  • ...driven by growing business volumes, customer acquisition, rising yields and margin expansion. Interest income mix Non-interest revenue mix Overview Placements Treasury bills & investment securities Loans and advances N57 N16 N33 N50 N76 2.9% 4.1% 3.1% 3.2% 2.9% N176 N47 N107 N161 N220 11.7% Commission on Insurance and 20.2% 21.6% 20.4% 23.4% 7.5% western union transfers 5.1% Other income (a) 5.7% 6.6% 4.8% Letters of credit commissions Financial 63.4% 33.4% Review 70.3% 73.6% 72.1% 71.8% 30.4% 22.9% 26.2% and fees 27.9% Other fees and commissions (b) 7.0% 5.1% 3.8% 3.3% 3.8% 10.9% 10.6% 11.8% 16.4% Remittance fees /Management 11.2% fees 23.8% Credit related fees Management 19.1% 16.9% 17.5% 19.0% 27.2% 27.3% 26.7% 26.6% 24.3% Risk 12.8% Commission on turnover (COT) 10.6% 9.4% 10.4% 9.2% FY10 Q111 H111 9m11 FY11 FY10 Q111 H111 9m10 FY11 Asset yield and cost of liabilities Comments Strategy Interest income growth positively impacted by a higher interest rate Net interest income Nbn Net interest margin* environment leading to solid growth in income from treasury and Average yield on interest earning assets Average cost of deposits investment securities as well as growth in income from loans and 9.6% advances 8.8% 9.0% 8.9% 8.6% Non-interest income primarily driven by credit related fees, commissions on transactions, rising fees from letters of credit Summary 8.0% service fees, recoveries and continued benefits of improving service 7.4% 7.1% delivery. 6.9% 6.1% Margin expansion on the back of improving yield on interest earning 3.2% assets and stable cost of interest bearing liabilities 2.0% 2.0% Rebalancing of earning assets to optimise yields further 1.8% 1.6% High interest rate environment slightly impacting cost of funds. Focus 122 38 88 129 183 remains on low cost liability generation (a) Investment income and recoveries FY10 Q111 H111 9m11 FY11 (b) Exchange gains/ foreign exchange income, Gain on disposal of investment property, Financial advisory fees, Loss/(Profit) on disposal of property and equipment© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 10
  • Underlying growth in operating income driven by stronger platform Operating income and expenditure N bn Operating expense breakdown N bn Overview Staff cost Depreciation Admin and general expenses NDIC Premium Operating income Operating expenses N147 7 4% N119 7 6% N107 4 4% 73 49% Financial Review 51 43% 41 38% N71 3 4% 7 9 6% 8 7% 26 37% 6% N34 4 6% 1 4% 40% 56 52% 59 Management 52 44% 17 48% 2 6% 37 53% 178 119 54 34 121 71 180 107 259 147 Risk 14 41% FY10 Q111 H111 9m11 FY11 FY10 Q111 H111 9m11 FY11 Operating income breakdown by SBU N bn (bank only) Comments Strategy Strong operating income growth, on the back of rising revenues and stable Treasury (a) Private banking Corporate banking funding costs Public sector Retail banking Institutional banking N161 N49 N110 N164 N245 Operating expenses impacted by one-off increases in staff costs and the 7 13% recently introduced AMCON resolution cost charge; adjusting for this, on a 31 19% 20 18% 29 18% 39 16% like for like basis, operating expenses came in significantly below inflation at 8.0% Summary 21 42% Admin and general expenses largely impacted by AMCON resolution cost 47 42% 76 46% 109 45% charge as well a branch and ATM expansion 77 48% Expanded footprint with 21 new business locations, 111 additional ATMs 5 11% and 2,411 Point of Sales (POS) terminals, bringing total business 12 11% 30 12% 12% 13% 21 13% locations, ATMs and POS terminals to 738, 1,649 and 5,122 respectively 19 6 0.3 1% 14 13% 31 13% as at March 2012 12% 1% 20 13% 30 0.7 2 1% 1% 10 20% 1 1% YTD increase in the number of customer accounts by 300,000 to over 8 1 16 15% 10% 33 13% 13 8% 17 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 FY10 Q111 H111 9m11 FY11 (a) Treasury is not a strategic business unit but contributes to the operating income© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 11
  • Focused on sustaining efficiency improvements Provision for credit losses (N bn) Cost to income ratio Overview Loan loss provision Provisions for other losses N44.8 67% 11.9 64% Financial Review N23.5 60% N21.6 59% 4.9 57% N14.4 32.9 0.6 22.4 18.7 Management N3.8 13.7 Risk 4.0 (0.8) (0.2) FY10 Q111 H111 9m11 FY11 FY10 Q111 H111 9m11 FY11 Movement in loan loss provision* (N bn) Comments Strategy 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 x General provision securities and N3.7 billion other losses. Provisions for credit losses relate to delinquencies that occurred in the 44.1 course of the financial year and our prudent approach on the loan portfolio in line with our risk management practices Summary N97.4 (88.3) Visible progress from our transformation agenda; 89% ATM migration 11.4 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 N35.2 expected from our centralised processing center and branch process 68.0 engineering 12.4 Steps to reducing our costs include centralised processing of our back- 22.8 office branch processes, reducing turnaround time and driving increased volumes 1-Jan-11 Additional provision Amounts written off 30-Dec-11 *includes interest in suspense and provision against leases© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 12
  • Improved performance in line with growth in profitability Profit (N bn) FY 2011 PBT split by business lines Overview PBT PAT 48% Retail & Corporate Banking 54% 102.8% (Dec 10: 80.4%) (a) Investment & Capital Markets 5.0% (Dec 10: 8.0%) Financial Review (b) Asset Management -8.8% (Dec 10: 8.6%) (c) N50.1 bn Mortgage Banking 2.3% (Dec 10: 0.2%) (d) Management Other -1.3% (Dec 10: 2.9%) Risk (e) FY10 Q111 H111 9m11 FY11 Comments Strategy 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 Summary 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 (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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 13
  • Improving shareholder returns in line with operational progress Return on average equity Return on average assets Overview Shareholders funds Nbn After-tax ROAE (a) Total assets Nbn After-tax ROAA 19.8% 18.1% 2.4% 15.46% 2.2% 2.1% 13.0% 10.3% 1.8% Financial 1.5% Review Management 341 341 321 322 365 2,305 2,496 2,913 2,861 2,839 Risk FY10 Q111 H111 9m11 FY11 (a)Interim numbers do not include unappropriated profit during the year but the full year numbers reflect FY10 Q111 H111 9m11 FY11 capitalised profits for the year Dividend Strategy EPS (N) DPS (N) Dividend yield(b) 3.32 11% 10% 9% Summary 1.97 1.84 5% 1.35 1.40 1.2 4% 1 1 4% 0.51 0.95 0.8 0.17 1% 0.6 0.1 Mar-06 Mar-07 Mar-08 Mar-09 Dec-09 Dec-10 Dec-11(c)(b) Share price as at 31st December (c)Proposed dividend© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 14
  • 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) Overview N2,839 N2,839 Deposits Equity Due to other banks Other borrowing Other liabilities Other Assets 6% [5%] 164 211 Other Liabilities 7% [5%] Ppty & Equipment 2% [2%] 57 93 N2,305 N2,496 N2,913 N2,861 N2,839 182 9% 8% 9% Investments 21% [15%] 587 11% 10% 5% 5% 4% 4% 3% 10% 11% 5% 6% 6% 11% 13% Financial 15% 14% 11% Review Net Loans & Advances 44% 1,240 [49%] 1,948 Deposits 69% [63%] 66% 70% 69% 63% 63% Treasury Bills 7% [1%] 187 Management Risk Inter Bank & Cash 21% 40 Short Term Liabilities 1% [4%] 604 [27%] 365 Capital & Reserves 13% [15%] Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 []December 2010 Assets Liabilities Deposits (N bn) Deposits mix by type (N bn) Strategy Bank Subsidiaries Bank growth rate Group growth rate Current accounts Savings accounts Term deposits Domiciliary accounts N2,011 N1,450 N1,582 N1,920 N2,011 N1,948 N1,920 N1,948 225 164 177 12% 191 12% 315 16% 386 19% 418 21% 254 N1,582 276 19% 284 18% N1,451 Summary 195 21% 342 17% 352 17% 288 15% 120 20% 9% 388 27% 432 27% 476 25% 7% 486 24% 496 25% 5% 0% -3% 4% -3% 609 675 -6% 42% 43% 804 42% 786 39% 747 38% 1,331 1,388 1,666 1,786 1,784 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 15
  • Large portion of the deposit liabilities are core thus providing stable funding for the business Deposits by SBU N bn (bank only) Comments Overview Retail banking Private banking Corporate banking Full year deposit growth driven by current and savings accounts in Public sector Treasury (a) Institutional banking both local and foreign currency N1,321 N1,388 N1,684 N1,786 N1,784 Approximately 62% of total deposits are core1 174 13% 186 13% 18% 253 14% 233 13% 298 34 3% 13 1% 28 2% 19 1% Our products are geared towards driving growth in low cost deposits 28 2% 313 23% Financial 308 23% 29% Review 498 28% 520 426 25% 101 7% 95 7% 19 1% 7% 23 2% 113 7% 125 7% 119 19 1% 20 1% 15 1% 697 52% 755 54% Management 800 48% 860 48% 885 50% Risk Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 (a) Treasury is not a strategic business unit but contributes to deposits Balance sheet efficiency Strategy Leverage ratio (times) Gross loans to deposit ratio 83.8% 85.4% Summary 67.0% 66.7% 65.5% 6.8 7.3 9.1 8.9 7.8 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 1Deposits with the Bank for more than 2 years© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 16
  • Capital and liquidity levels provide solid foundation for asset growth Earning assets mix (N bn) Evolution of capital and liquidity ratios Overview Loans and advances Treasury bills Due from other banks Total RWA (Nbn) Tier 1 capital ratio Reserve deposits with CBN Investments (a) Managed funds N2,196 N2,446 N2,853 N2,569 Total capital adequacy ratio Liquidity ratio (Group) N2,796 2% 1% 1% 1% 0% Liquidity ratio (Bank) 68.2% 16% 21% 19% 19% 23% 1% 64.9% 0% 3% 4% 4% Financial Review 25% 21% 30% 22% 16% 1% 1% 7% 61.0% 5% 2% 50.4% 50.1% 55.4% 55% 55% 50% 48% Management 45% 42.1% Risk Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 (a) securities, subsidiaries/associates, property 38.3% 39.3% Components of capital (N bn) 32.1% Strategy Tier 1 Capital Tier 2 Capital 46 20.2% 20.4% 19.3% 45 50 17.3% 17.5% 49 44 17.8% 18.1% 16.8% 14.9% 15.4% Summary 332 335 315 315 358 1,870 1,856 1,956 2,049 1,980 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 FY10 Q111 H111 9m11 FY11© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 17
  • Review of first quarter 2012IFRS compliant results
  • Q1 2012: Continued positive momentum to deliver strong results - IFRS Overview 42.5% growth in gross earnings to N92.3 billion (Q1 2011: N64.8 billion) Earnings 50.2% growth in operating income to N74.2 billion (Q1 2011: N49.4 billion) Non-interest income contribution of 21% (Q1 2011: 25%) Financial Review 101.6% growth in profit before tax to N28.9bn (Q1 2011: N14.3bn) Cost to income ratio: 60.9% (Q1 2011: 70.3%) Profitability After tax ROE1: 27.0% (Q1 2011: 12.0%) After tax ROA1: 3.3% (Q1 2011: 1.9%) Management EPS1: N3.01 (Q1 2011: N1.49) Risk Net interest margin1: 9.5% (Q1 2011: 6.7%) Capital adequacy ratio: 19.9% Strategy Tier 1 capital ratio: 16.3% Stronger & more liquid balance sheet 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%) Summary 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) Business volumes 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%) 1Annualised© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 19
  • Evolution of Q1 2012 group profit after tax (N bn) Overview 73.1 19.1 [16.4] [48.4] Financial Review [(9.4)] (12.7) [(4.6)] (5.4) Management Risk Strategy [(34.7)] [(0.4)] 28.9 (45.2) (0.2) [14.3] [(2.1)] 24.5 4.3 [12.2] Summary Interest income Interest expense Impairment charge for credit Non-interest income Operating expenses Share of associates results Profit before taxation Tax (b) Profit after tax losses© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 20
  • Strong earnings growth on the back of growing business volumes, increasing segment specialisation, customer acquisition, innovative product development, rising yields and margin expansion Gross earnings N bn Interest income mix (N bn) Overview Interest Income Non Interest Income Placements Treasury bills & investment securities Loans and advances N92 N92 42% N92 19 21% Financial N65 Review 34 71% 50 68% 16 25% Management 9 19% 21 28% Risk 48 75% 73 79% 10% 5 2 3% Q111 Q112 Q111 Q112 Asset yield and cost of liabilities Operating income (N bn) Strategy Net interest income Nbn Net interest margin* 50% Yield on interest earning assets* Cost of deposits* 10.7% 74 8.3% 9.5% Summary 49 6.7% 2.0% 2.1% 39 60 *Annualised Q111 Q112 Q111 Q112© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 21
  • Increased traction in our transformation agenda is driving improvements in our overall efficiency Operating expense N bn Impairment charge for credit losses N bn Overview Staff cost Depreciation Admin and general expenses NDIC Premium N45 2 6% N35 Financial 6% Review 1 19 43% 17 43% 5.4 2 7% 2 7% 22 44% Management 4.6 14 44% Risk Q111 Q112 Q111 Q112 Cost to income ratio Profit N bn Strategy PBT PAT ROE ROA 27.0% 70.3% 29 Summary 25 12.0% 14 12 60.9% 3.3% 1.9% Q111 Q112 Q111 Q112© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 22
  • Stable funding base Balance sheet structure as at Mar 2012 (N bn) Funding mix (N bn) Overview N2,978 N2,550 Other Assets 7% [4%] Other Liabilities 7% [7%] Ppty & Equipment 2% [2%] 185 210 Deposit from customers Equity Deposit from banks 61 73 Other Borrowings 2% [5%] 233 Due to Other Banks 8% [9%] Other borrowing Other liabilities Investments 22% [22%] 662 N2,550 N2,998 8% 9% 5% 2% 9% 8% Financial Review 12% Net Loans & Advances 44% 16% [50%] 1,328 2,066 Deposits 69% [62%] 69% 62% Management Inter Bank & Cash 25% 743 32 Short Term Liabilities 1% [1%] Risk [22%] Capital & Reserves 12% [16%] 364 [] March 2011 Mar-11 Mar-12 Assets Liabilities Deposit mix (N bn) Liquidity Strategy Current accounts Savings accounts Term deposits Domiciliary accounts Liquidity ratio Gross loan to deposits N1,576 N2,066 81.0% 191 12% 418 20% 284 18% 64.3% Summary 357 17% 432 27% 57.9% 514 54.7% 25% 668 42% 777 38% Mar-11 Mar-12 Mar-11 Mar-12© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 23
  • Improving earning asset mix Earning asset mix (N bn) Loans and advances (N bn) Overview N2,350 N2,692 1% 0% Bank Subsidiaries N1,328 22% 25% Managed funds N1,276 174 164 0% 5% Investments (a) 22% 21% Financial Review Reserve deposits with CBN Loans and advances to banks 1,112 1,153 54% 49% Loans and advances to Management customers Risk Mar-11 Mar-12 Mar-11 Mar-12 Asset quality Strategy NPL coverage NPL ratio Cost of risk (annualised) 7.60% 117.10% Summary 55.80% 2.70% 1.40% 1.60% Mar-11 Mar-12© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 24
  • Key adjustments of IFRS numbers to NGAAP NGAAP IFRS Difference Major reconciliatory items Nmillion Nmillion Nmillion Explanation Overview Adjustments for Interest In Suspense (written back), Credit related fees (Now treated as EIR) and Interest Interest income 64,754 73,148 (8,394) subsidy on staff loans (now grossed up) Adjustment for Credit related fees now part of EIR (contra Financial Fees and commissions 18,815 15,573 3,242 in Interest Income) Review Incremental impairment charge under the IFRS model, taking cognisance of Expected Discounted Cash Flow Loan impairment provision 5,559 5,419 140 from Impaired assets, mainly from Collateral values MTM losses passed as an adjustment to equity under IAS Management Mark to market adjustment on AFS 4,309 - 4,309 39 as required by the FRC Risk Subsidy on staff loans included, as well as depreciation on stock of fixed assets available for use but not yet Operating expenses 44,760 45,151 (391) deployed 9,210 Strategy Interest Payable on Deposits now added to the deposit Deposits 2,064,518 2,065,505 (987) balance Interest Receivable on loans not yet applied now added Summary Loans and advances 1,323,320 1,527,534 (204,214) to Loans and Advances© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 25
  • Healthy underlying loan growth, with heightened focus on optimising the yield in the portfolio further in coming periods Net loans and advances Loans and advances by type (bank only) Overview Overdraft Term loans Commercial papers Money market lines Bank Subsidiaries Bank growth rate Group growth rate N1.3tn 3.0% 0.0% N1.3tn 10.3% 7.4% 5.4% N1.3tn N1.2tn N1.2tn 12.7% 16.4% N1.1tn 178 14.2% 15.9% 158 119 107 12.7% 13.9% 148 10.2% 110 11% Financial 7% Review 8% 7% 4% 65.7% 63.6% 68.1% 63.4% 62.8% 66.3% 1% Management -1% -2% -2% Risk -2% -2% -3% 1,025 1,106 1,086 1,161 1,133 1,149 13.8% 14.2% 12.5% 14.7% 17.5% 15.6% Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Ageing analysis of performing loan book (bank only) Loans and advances by maturity (bank only) Strategy 0 - 30 Days 31 - 60 Days > 61 Days 0 - 30 days 1 - 3 mths 3 - 6 mths 6 - 12 mths Over 12 mths 1.2% 3.3% 2.5% 9.0% 2.2% 10.6% 11.4% 10.5% 29.9% 38.9% 41.6% 38.3% 41.3% 44.3% Summary 3.4% 1.9% 1.8% 1.8% 2.8% 21.3% 4.0% 3.9% 10.9% 6.0% 7.6% 4.6% 8.6% 3.5% 4.6% 9.0% 96.3% 3.5% 4.1% 94.5% 15.0% 12.8% 19.3% 15.9% 87.6% 87.6% 86.8% 87.6% 45.8% 42.9% 32.4% 32.6% 27.8% 26.9% Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 26
  • Well diversified loan book, driven by growth in our corporate banking business Breakdown of gross loans by SBU (N bn) (bank only) Comments Overview Institutional banking Retail banking Public sector (a) Net loan book growth of 9.2% to N1.2 trillion for the full year Corporate banking Private banking N1.1tn N1.2tn N1.2tn N1.3tn N1.2tn N1.2tn Adjusting for N147 billion swapped in money market lines within our loan 5 10 book for higher yielding customer loans as well as sales to 170 226 229 246 277 270 AMCON, underlying growth in customer loans was 40.6% 71 100 120 109 Increasing proportion of obligors have been rated; improving overall Financial 205 119 133 Review 229 quality of loan book 222 250 213 211 Performing accounts are closely monitored by independent control units Focus on delivering solutions for our customers and driving growth in our 682 loan book as a result 665 597 646 548 560 Management Loan book growth to be driven by the oil & gas, infrastructure, trade and general commerce sectors Risk Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 (a) Public sector exposures: federal and state governments Gross loans and advances (sector exposure) Mar Core consumer/retail product portfolio1 Strategy 2012 (bank only) Consumer auto loan 1% [2%] Manufacturing 12% [8%] General 14% [13%] (c) General commerce 8% Personal loan 9% [8%] Residential [4%] Consumer 8% [6%] mortgage 15% Summary [20%] Information and Government 9% [6%] communication 6% (b) [6%] Finance and insurance N1.2 tn 3% [19%] N192.2 bn Oil & gas Residential Asset backed - retail services 5% mortgage 2% [3%] 1% [2%] [13%] Real estate - Co-operatives 13% commercial 2% [2%] [6%] Real estate - home developers 2% [5%] Oil & gas downstream []December 11 10% [21%] Oil & gas Capital market 1% Asset backed - [2%] consumer 61% (b) Government exposures: federal, state and local governments [0%] upstream 7% [66%] (c) General includes: hotels& leisure, logistics, religious bodies, agriculture, construction, power & energy and transportation 1Core consumer/retail portfolio represents retail loan exposures <N50mn© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 27
  • Significant improvement in asset quality on better monitoring and benefits from more aggressive management Asset quality NPL sector exposure Mar 2012 (bank only) Overview Finance and insurance Agriculture 7% General commerce Information and NPL Nbn NPL coverage 0.2% [0.1%] [8%] communication 0.4% 4% [3%] NPL ratio Cost of risk (annualised) [0.2%] Real estate-home developers 0% [0%] 113.2% 104.9% 104.6% Consumer 21% 95.9% [13%] 84.2% 87.8% Financial Residential mortgage Review 15% [16%] N31.6 bn Real estate-commercial General 24% [28%] 0% [0%] 7.8% 7.3% 3.8% 4.7% (a) 2.6% 2.7% Capital market 1% [0%] Oil & gas services 23% [22%] Management 2.4% 1.3% 2.3% 2.0% 2.6% 2.0% Risk 94 99 49 64 34 37 Oil - downstream []December 11 4% [8%] (b) General includes: hotels& leisure, logistics, religious bodies, manufacturing, construction, government and Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 transportation NPLs by SBU N bn (bank only) NPL ratio within each SBU (bank only) Strategy Corporate banking Institutional banking Public sector Retail banking Corporate banking Institutional banking Public sector Retail banking 91 96 49 63 28 32 8.1% 4.3% 5.1% 2.4% 2.7% 8.3% 44 48% Summary 52 54% 69% 40 65% 28 67% 20 64% 22.7% 23.6% 9.6% 34 17.0% 16.5% 8.9% 0.1 0% 1 1% 0.1% 33 36% 0 0% 0 0% 1.5% 29% 0 0% 6 3 8% 6.4% 0.1% 26 10% 0 2% 1.4% 2.0% 5 11% 0 1% 0.0% 5.7% 0.0% 0.1% 1.1% 0.1% 9 31% 8 26% 10 20% 16 25% 8.6% 6.3% 3.1% 3.1% 15 16% 15 15% 6.4% 4.2% Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 28
  • Our focus is on recoveries Ageing analysis of NPL portfolio (bank only) Comments Overview 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 32.4% We will focus on recoveries over coming periods 40.8% 44.0% 47.6% 56.9% 56.2% 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 Financial Review and SME segments 33.1% 5.0% 30.4% 23.9% We continue to review our credit policy to ensure high quality new loans 4.1% 16.5% are being underwritten while also ensuring early warning signs of deterioration are promptly highlighted and remedial action is set in motion 47.4% 34.5% 39.1% Deterioration in portfolio quality is proactively highlighted for appropriate 32.0% Management 28.8% 27.3% remedial action as a result of institutionalised bank wide multi level Risk Criticised Assets Committee model Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Sector NPL ratio s (bank only) Strategy % of gross Dec-11 Mar-12 loans as at 2.3% Mar-12 10.6% 8.3% Summary 8.9% 6.7% 8.9% 6.3% 6.1% 5.9% 5.9% 5.8% 4.1% 1.3% 31.7% 0.5% 6.3% 1.0% 2.8% 1.7% 2.2% 2.3% 2.1% 6.1% 9.4% 13.1% 1.5% 1.2% 1.4% 1.1% 0.7% 0.3% 0.2% 0.1% 0.2% 0.1% 0.0% 0.1% 0.1% 0.1% Agriculture Consumer Real estate General* Capital market Oil & gas Transportation General Construction Finance and Information and Government Manufacturing activities and storage commerce insurance communication *General includes: hotels & leisure, logistics and religious bodies© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 29
  • Effective risk management framework Overview Board of Directors Financial Review Board Audit Board Credit and Risk Committee Assessment Management Risk 1 2 GMD/MCC GMD/MANCO Strategy Internal Audit Summary 3 ED/CRO 1 Group Managing Director/Management Credit Committee 2 Group Managing Director/Management Committee 3 Executive Director/ Chief Risk Officer© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 30
  • FirstBank, a diversified financial services group FirstBank Group Holding Company (HoldCo) Structure Holdco Structure Implementation Update Overview Secured CBN approval to implement our compliance plan in respect of non-banking businesses and FBN Holdings HoldCo HoldCo (FBN Holdings) will be a non-operating legal entity domiciled in Nigeria and regulated by the CBN Financial Review FirstBank will continue to focus on the core banking business and will retain FBN UK, FBN Bureau de Change, First Pension Custodian, and Banque Internationale de Credit (BIC) as its subsidiaries Management FBN Capital will be the primary vehicle of our FBN FBN Investment Banking and Asset Management (IBAM) Risk FBN FBN Life First FBN FirstBank Insurance Micro- business Capital Assurance Registrars Mortgages Brokers finance First Registrars is in the process of being divested in compliance with the new regulation FBN Mortgages will divest its equity investments in Strategy FBN Bank First real estate in accordance with CBN rules and the UK Trustees mortgage activities will be transferred to the Bank The restructuring will be implemented by means of a Scheme of Arrangement scheduled for H2 2012 FBN Bureau de FBN FirstBank will be delisted from the All Share Index Securities and FBN Holdings will become the listed entity Summary Change BIC First Funds First Pension Custodian© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 31
  • The FirstBank Group aspires to be Sub-Saharan Africa s leading diversified Financial Services Provider Notable Achievements Across Subsidiaries In 2011 Group Strategic Priorities Overview § Grew AUM by 24% YoY by increased focus on FI 1. Restructuring for Growth § Appointed Lead Trustee to major state Bond Develop a stronger platform for achieving our business § Won several mandates with issuing and objectives FBN Capital Improve coordination and specialisation by clustering investment houses, including IFC Bond issue similar businesses while ensuring an optimal legal § Launched research business to enhance market Financial framework, strict regulatory compliance and tax Review credibility and profile across institutional investors efficiency § Held first annual Investors Conference At the Bank level, drive increased segment specialization across the organisation 2. Business Line Expansion § Regained previously lost Structured Trade Management Focus on driving growth in investment banking and asset Commodity Finance (STCF) business management business and insurance, given strong profit Risk FBN Bank § Scope of STCF book expanded to include cotton potential and very strong synergies with commercial and tea banking UK § Private Banking desk expansion commenced and Focus on the customer acquiring new customers along ongoing priority segments (i.e. Emerging Corporates, Affluent § Significant growth in Short Term trade assets retail, and the Unbanked), growing customer Strategy profitability, and leveraging our enhanced operations platform to offer better service. § Revenue of over N1 billion in first full year of 3. International Expansion FBN Life operations, with over 90% in premium income Extend our banking franchise and raise the Bank s Assurance profile beyond its current borders, establishing presence § Implementing banc assurance model through Summary in priority Sub-Saharan African countries suite of retail products 4. Synergies and Cross Selling Active efforts by the Bank s businesses to collaborate for joint growth e.g. Public Sector and IBAM, Private § Maintained industry leadership with 37% market Banking with FBN UK and IBAM. First Pension share of industry assets under custody Custodian § Deepened penetration in money market and fixed- 5. Sequencing Growth Systematically income business through appointment by AMCON Disciplined and staged approach to growth across to provide custodial services dimensions mentioned above© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 32
  • The Bank has defined its imperatives for the 2011 2013 cycle in both financial and non-financial terms PRIMARY STRATEGIC OBJECTIVES Overview 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 Financial Review 1. Fees and commissions Increase revenue from non- Channel shift campaigns, brand interest income sources 1. Brand Transformation health campaigns Increase Management Adjust mix towards assets with Fast and friendly service, without Risk 2. Selective LAD creation higher (risk adjusted) total yield 2. Service Excellence sacrificing processing quality Implement strong risk-based Improve effectiveness of end-to- 3. Pricing optimisation pricing regime, Manage revenue 3. Credit Processes end credit process from origination leakages Excellence Strategy to recovery Targeted savings 4. Low-cost deposit promotions, product innovations 4. Performance Align individual incentives with for priority segments, branch Management enterprise/shareholder priorities Liabilities growth expansion Summary Capability building in critical Migrate retail mass market clients areas, HR alignment with differing 5. Talent Management 5. OPEX containment to alt. channels, rationalize BU needs unprofitable branches ROA1 3% C/I Ratio 55% 2013 STRATEGIC ROE1 25% NPL 6% TARGETS Total Assets #1 Service Levels Top 51) Pre-tax return on equity and pre-tax return on assets © FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 33
  • Each market facing unit has a number of important drivers that will be integral to attaining our objectives Institutional Banking Private Banking Public Sector Overview Ensure linkage of lending to Drive customer acquisition and contribution to Target revenue/expenditure transaction banking / fee sources FirstBank group with defined referral management accounts (e.g., FAAC) in (e.g., cash mgt, trade finance, risk system and Group cross-sell incentives wealthiest states and business in products) Drive transaction and fee income via investment key MDAs Leverage value chains of institutional products/AUM and interest income via credit cards Drive value-added services clients and mortgages (onshore/offshore) (e.g., collections, payment Financial Review Deepen capabilities for growth services) sectors (e.g. Power and Optimize lending within Infrastructure) regulatory limits and extend via Grow lending in right portfolio PPP participation and other mix/concentration Group offerings Management Institutional Federal Clients HNI* Government Risk Corporate Banking Manage risk with large clients Retail and drive fee income through Continue to generate low cost payments, account stable funding via CASA turnover, trade finance etc deposit mobilization Grow small ticket lending at Make significant strides in Strategy right price to large number of Corporate State acquiring affluent and small corporate customers Clients Affluent Government business customers as well as Establish strong acquisition youth pipeline for new/referred Expand consumer and small corporate customers business credit (secured Summary lending, cards) Mass Market Local SME Government*High Net-worth Individuals Business Individuals Government© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 34
  • Retail banking group: strategy and performance overview Retail Banking Group 2011: Performance Review Key 2011 Financials1 Overview § Strong LAD growth (36%) as a result of improvements to (N bn) % of consumer and SME credit capability totals 50% Affluent § 22% growth in deposits as a result of increased branch density and customer access to FBN locations 885 Financial SME Mass Market Local Review Govt § PoS deployment growth; 2,400+ at Dec 2011, a 143% increase 18% 45% 2011 2013: Priority Initiatives § Strong growth in fees & commission income (98% growth 213 109 between Q1 and Q4) due to re-pricing initiatives and recovery (AMCON) Management § Increase Market share of customers in the Deposits LAD Net Risk Youth, Affluent, Diaspora and SME Revenues segments § Increase branch density and customer 2012: Key Focus Areas access to FBN locations Strategy § Migrate transactions to alternative channels Aggressively migrate sizeable number of mass-market customers to alternative channels and grow the (ATMs, PoS, internet, mobile) segment in a cost-effective manner. Expand retail distribution network with deployment of 100+ branches and Quick Service Points § Improve consumer and SME credit Intensify focus in understanding behavior and preferences of customers in the affluent, youth, mass Summary capability SME and diaspora segments and develop or improve on the range of services/products that best suit their needs. § Deploy mobile payment/money offering Aggressively increase PoS terminal install base § Customer Analytics to enable cross-selling Introduce new sales model to market and serve Retail customers 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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 35
  • Private banking group: strategy and performance overview Private Banking Group 2011: Performance Review Overview Key 2011 Financials1 Retained 100% of account inherited from other parts of the (N bn) % of HNI Group in addition to winning mandates for 50+ new 1% totals accounts 15 1% Developed partnership model with IBAM and FBN UK to Financial 5 Review streamline cross-sell and maximize opportunities 1% Strong AUM growth with 47% increase in 9 months ended 2 2011 2013: Priority Initiatives December 2011 Deposits LAD Net Management Execute specific market entry initiatives to Revenues Risk drive risk assets creation and deposit mobilization Introduce premium credit card 2012: Key Focus Areas products Strategy Offer market leading rates on term Grow AUM volumes by offering a range of high-yielding onshore and offshore investments deposit products Harness multiplier effect from investment-based transaction to grow Net Revenues. Offer competitive fees for investment/asset Reduction of costs while maintaining desirably high service levels Summary management transactions Develop and implement a bank-wide Implement Global Private Banking model to ccoordinate activities of private banking businesses across referral management system geographies (i.e. Nigeria, UK). 1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 36
  • Corporate banking group: strategy and performance overview Corporate Banking Group 2011: Performance Review Overview 25% YoY growth in low-cost deposits, primarily Key 2011 Financials1 bolstered by domiciliary accounts growth of 92% YoY (N bn) % of 23% totals Impressive asset creation traction with LAD growth of 277 56%, broadening existing revenue base 7% Financial Review 119 13% Higher income contribution from transactional 2011 2013: Priority Initiatives products i.e. trade finance and LCs 31 Service delivery gains attained; KPMG rank is now Management Aggressively growing existing customer Deposits LAD Net business and controlling a greater wallet 6th, up from 10th Risk Revenues share Reducing concentration risk through the deliberate focus on the lower-middle 2012: Key Focus Areas customer segment and increasing the Strategy number of customers significantly; Improve service to the identified gap in the lower end of the SBU (Emerging corporates business segment) Adopting the value chain approach to deepen, interlock and wrap around Conscious focus on low cost demand deposit by trapping transaction flows customers businesses. Summary Increase emphasis on fee-based transaction volumes Migrating cash management services of our customers to alternative channels 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 1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 37
  • Institutional banking group: strategy and performance overview Institutional Banking Group 2011: Performance Review Overview § Considerably improved share of wallet from key accounts Key 2011 Financials1 across multiple industries (N bn) 47% % of § Net Interest income boosted by re-pricing of risk assets totals 548 § 35% growth in deposits, driven by 178% growth in 13% domiciliary deposits Financial Review § LAD growth of 27%, fuelled by 81% growth in CPs for trade 233 16% finance and steady growth in upstream Oil & Gas portfolio 2011 2013: Priority Initiatives 39 § Lower yielding term loans now represent 55% of the overall asset portfolio and witnessed flat growth Management Acquire new large corporates/multinational Deposits LAD Net clients in the following sectors: Energy Risk Revenues Upstream, Conglomerates, Transportation and Infrastructure 2012: Key Focus Areas Deepen share of wallet of existing Strategy Manufacturing, Financial Institutions and Telecoms clients § Achieve optimal utilization of approved credit lines Exploit existing opportunities across the § Focus on trade business in downstream sector, participate actively in upcoming marginal fields bid, finance CAPEX of customers value chains of Telecoms and Manufacturing clients Summary § Optimal pricing of assets and liabilities, hedging deals, access to cheaper funding for lending Leverage FBN Capital to boost cross-selling § Explore cross selling opportunities with IBAM to develop appropriate structured/project finance solutions for fees generation for clients § Partner with E-Business to aggressively market e-business solutions to key customers across the IBG segments e.g. POS & Web Payments 1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 38
  • Public sector group: strategy and performance overview Public Sector Group 2011: Performance Review Key 2011 Financials1 Overview Fed Secured #1 spot in public sector banking nationally (N bn) Govt % of 29% totals State Significantly increased cash collection mandates for fee Govt collection in various tertiary institutions across the nation 520 Financial Signed FAAC accounts for key South-South and South- 10% Review West states 119 12% 2011 2013: Priority Initiatives 30 Successfully issuance of state bond for key middle-belt state in partnership with IBAM § Sign on FAAC accounts in 10 priority states Deposits LAD Net Management with the highest Revenue and Budget Improved project/infrastructural financing & PPP lending Revenues Risk allocations offering with signing of economic development MOU with SW state § Expand cash management offering to educational/tertiary institutions 2012: Key Focus Areas Strategy § Develop Project Infrastructure financing for states and increase PPP lending Attain customer growth by focusing on new frontier states and specific MDA s who are not presently on our books § Increase depth and breadth of top ten percent of Federal Government institutions Skew Deposit mix to reflect more current accounts while using competitive pricing to drive assets Summary and major state institutions Fine-tune our customer engagement model to increase attractiveness to Foreign missions § Create a customer service orientation to focus on constantly improving customer Ensure repayment deadline are met on all facilities satisfaction and measure performance 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 1) Individual SBU financials may not add up to total reported for Bank due to Head Office and Treasury allocations© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 39
  • Initiatives executed by our strategic resource functions have contributed to business unit performance Progress Update Overview BRAND Service Excellence TRANSFORMATION 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 NON FINANCIAL PRIORITIES Financial Review Centralized processing - ~ N1 billion in annual savings expected at steady state; SERVICE EXCELLENCE 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 Management Branch transformation 300% growth in e-product signup at branded branches Risk Customer experience/issue resolution Over 80,000 calls in Q4 alone CREDIT PROCESS EXCELLENCE Operational Excellence Strategy Cost to Income ratio down 10% 15% decline in cost to serve driven by higher transaction volume growth relative to growth in OPEX TALENT MANAGEMENT Brand transformation Summary 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 PERFORMANCE Global Finance Awards MANAGEMENT© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 40
  • FirstBank: Well positioned to consolidate its leadership position in the industry Robust corporate governance framework with strong management team Overview Good brand recognition, wide accessibility, innovative product development , strong customer Positioned for growth and improved efficiency within acquisition and loyalty driving increasing market share across several dimensions promising and thriving Clear industry leader with about 14% of total industry assets and 16% of loans and advances macro- economic On-going transformation driving significant improvement in the business model, geared to build environment Financial sustainable and accelerating income streams Review Strong opportunities to enhance revenue growth mobile banking, cashless policy, etc Improving and sustainable 83% of total liability funding is derived from relatively low-cost and stable customer deposits funding base and 14% market share of customer deposits, largest in the industry Management performance Improving service quality and delivery Risk Liquidity ratio well above regulatory requirement Unique ability to support Continued growth in loan book good market opportunities Well capitalised to leverage opportunities Strategy Resilient asset quality Robust risk management framework supported by an sound risk Diversified and well managed loan portfolio within strict portfolio concentration limits management framework One of the lowest NPLs in the industry Accelerated earnings and margin expansion Summary Improving returns to shareholders, driven by better efficiency and superior operating model Attractive investment proposition 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© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 41
  • Contact details Overview Financial Review Head, Investor Relations Oluyemisi Lanre-Phillips Email: oluyemisi.lanre-phillips@firstbanknigeria.com Phone: +234 (1) 9052720 Management Risk Investor Relations Team investor.relations@firstbanknigeria.com Phone: +234 (1) 9051146-7 Strategy Summary© FirstBank 2012 | Results Presentation for FY 2011 & Q1 2012 | 3 May 2012 42