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 Re...
Disclaimer  This presentation is based on First Bank of Nigeria Plc s ( FirstBank or the Group or the Bank ) audited resul...
First Bank of Nigeria is a diversified financial services group  Overview                                                 ...
2011: Continued progress towards achieving broader strategic imperatives                                                  ...
Improving outlook for the Nigerian economy               Global Economy                                                   ...
Full Year 2011: Solid results despite challenging environment  Overview                                                   ...
Evolution of full year group profit after tax (N bn)  Overview                                                            ...
Significant improvements in revenue generation capabilities, resulting in   relatively higher run rates                   ...
...driven by growing business volumes, customer acquisition, rising yields   and margin expansion.                        ...
Underlying growth in operating income driven by stronger platform                                     Operating income and...
Focused on sustaining efficiency improvements                                          Provision for credit losses (N bn) ...
Improved performance in line with growth in profitability                                                              Pro...
Improving shareholder returns in line with operational progress                                                     Return...
Sustained growth and improvement in balance sheet efficiency on the back   of low cost funding                            ...
Large portion of the deposit liabilities are core thus providing stable   funding for the business                        ...
Capital and liquidity levels provide solid foundation for asset growth                                            Earning ...
Review of first quarter 2012IFRS compliant results
Q1 2012: Continued positive momentum to deliver strong results - IFRS  Overview                                           ...
Evolution of Q1 2012 group profit after tax (N bn)  Overview                       73.1                                   ...
Strong earnings growth on the back of growing business volumes,   increasing segment specialisation, customer acquisition,...
Increased traction in our transformation agenda is driving improvements in   our overall efficiency                       ...
Stable funding base                               Balance sheet structure as at Mar 2012 (N bn)                           ...
Improving earning asset mix                                       Earning asset mix (N bn)                                ...
Key adjustments of IFRS numbers to NGAAP                                                                  NGAAP         IF...
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
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
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
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
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
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
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
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
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

  1. 1. First Bank of NigeriaFull Year December 2011 & First Quarter 2012 Results Presentation to Analysts and Investors
  2. 2. 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)
  3. 3. 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
  4. 4. 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
  5. 5. 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
  6. 6. 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
  7. 7. 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
  8. 8. 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
  9. 9. 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
  10. 10. ...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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. 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
  15. 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) 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
  16. 16. 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
  17. 17. 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
  18. 18. Review of first quarter 2012IFRS compliant results
  19. 19. 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
  20. 20. 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
  21. 21. 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
  22. 22. 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
  23. 23. 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
  24. 24. 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
  25. 25. 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
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