Wema Bank PLC · NSENG:WEMABANK
Wema Bank — H1 2017 Earnings Presentation
32 slides from Wema Bank's earnings presentation, Oct 30, 2017
Slide 1: Presentation to Analysts & Investors: Half Year Result
PRESENTATION TO ANALYSTS & INVESTORS 2016 FULL YEAR RESULT APRIL 2017 VALUE-DRIVEN RELATIONSHIP BANKING Since 1945 2017 Half Year Result Presentation to Analysts & Investors Slide No. 1
Slide 2: 2017 Half Year Result Presentation to Analysts & Investors Slide No. 2
2017 Half Year Result Presentation to Analysts & Investors Slide No. 2
Slide 3: Presentation Outline
Presentation Outline 1 Business & Operating Highlights Global & Macro Economic Environment Banking Industry Highlights 2017 Half Year Highlights 05 06 07 Progress on Strategic Priorities 08 ALAT Progress Update 09 Non-Financial Highlights 10 Trend Overview 11 2 2017 Half Year Financial Performance F
Slide 4: Section 1: Business & Operating Highlights
Business & Operating Highlights Section 1 Global & Macro Economic Environment 05 Banking Industry Highlights 06 2017 Half Year Highlights 07 Progress on Strategic Priorities 08 ALAT Progress Update 09 10 Non-Financial Highlights 11 Trend Overview 2017 Half Year Result Presentation to Analysts & Inve
Slide 5: Global & Macro-Economic Review
Global & Macro-Economic Review Global Environment 3mth Avg. Brent Crude Data ▪ Global environment fraught with uncertainty and volatility arising from inability to execute reform agenda and Brexit. 65 • The Eurozone, China and Japan record improving growth, as measured by released economic data1 wit
Slide 6: Policy Highlights
Policy Highlights ▪ MPC maintains MPR AT 14% alongside liquidity and Cash Reserve Ratio at 30% and 22.5% respectively, with consideration to headwinds impacting the ▪ The CBN reviews upward foreign borrowing limit by global and domestic banks from 75% to 125% of shareholders’ fund. Net environment.
Slide 7: 2017 Half Year Highlights
2017 Half Year Highlights Continued improvements recorded in the retail space N30.37bn EARNINGS 25.19% CREDIT BBB- (SHORT TERM RATING) No 1. bank to offer a full digital banking experience A3 (LONG TERM RATING) RATINGS 1.7mn BBB- (NATIONAL LONG TERM RATING) F3 (LONG TERM RATING) CUSTOMER BASE ATMs 2
Slide 8: Progress on Strategic Priorities
Progress on Strategic Priorities Strategic Priorities Tasks Status • Grow deposit volume through Retail and Digital Partnerships. o Additional 120,000 retail accounts opened between Jan. – Jun. 2017. o Deposit volumes declined by N20billion in a bid to reprice balance sheet. o Savings deposit increa
Slide 9: ALAT Progress Update
ALAT Progress Update Since the launch of ALAT in May 2017 , we have on-boarded over 26,000 customers as at June 30, 2017 . 26,737 0 1 1 0 1 0 0 1 41,360 2,967 Accounts opened 0 1 1 1 NNN savings goals 1 1 0 0 1 0 1 0 transactions executed created across 1,762 0 0 1 0 totaling N850M customers with a
Slide 10: Non-financial Highlights
Non-financial Highlights The Launching of the First Digital Banking in Nigeria by Wema Bank - ALAT Kaduna Branch Opening His Excellency, Nasir El-Rufai, Governor of Kaduna State in attendance during the formal opening Campus Storms The Bank has been involved in over 10 University Campus storms, as w
Slide 11: Stable and Consistent Performance
Stable and Consistent Performance Total Asset Deposit (customer) Gross earnings Loans & advances (net) 11.53% ; 5yr CAGR (Assets), 10.20%, 4yr CAGR (Deposits); 11.88%; 4yr CAGR (Gross earnings)). CAGR indicative of the period 2012-2016. 2017 Half Year Result Presentation to Analysts & Investors Slid
Slide 12: Section 2: H1'2017 Financial Performance
H1’2017 Financial Performance Section 2 Financial Highlights 13 Improving Earning Trend 14 Efficiency 15 Margin Analysis 16 Profitability 17 Deposits 18 Loan Portfolio & Analysis 19 Asset Quality 20 Capital Ratio 21 Managing Risks 22 Key Financial Metrics 23 2017 Half Year Result Presentation to Ana
Slide 13: Financial Highlights
Financial Highlights H1’2017 H1’2016 2016FY Gross earnings N30.37bn 24.26bn N54.25bn Earnings, Profit, Capital PBT N1.43bn 1.30bn N3.28bn PAT N1.22bn 1.10bn N2.59bn CAR 12.74% 13.36% 11.07% H1’2017 H1’2016 2016FY Deposits (customer) N251.74bn N253.84bn N283.33bn Revenue Generation Loans (net) N205.7
Slide 14: Improving earnings trend
Improving earnings trend Gross Earnings Income Mix (H1’2017) Income Mix (H1’2016) Interest Income 30.00 N'bn 25.00 3.84 25.37 20.00 2.44 2.96 20.16 15.00 17.50 10.00 21.45 17.39 Non-Interest Income Non-Interest Income 14.00 5.00 (H1’2017) (H1’2016) 0.00 0.54 0.33 0.08 H1'2015 H1'2016 H1'2017 Cash &
Slide 15: Efficiency
Efficiency External headwinds impacting on cost management Cost-to-income Operating Expenses 14 N'bn 12 11.39 11.97 11.10 10 5.08 5.69 4.98 8 6 1.13 1.13 1.15 4 5.18 Comments 4.99 5.13 2 • Operating expenses increased by 5.02% from N11.39 billion from N11.97 billion as at H1’2017. Drivers for the in
Slide 16: Margin Analysis
Margin Analysis Yield on Assets Net Interest Margin Comments ▪ Yield on assets (YOA) shows improvement, increasing by 15.58% from 13.92% (H1’16) to 15.95%. Drivers for this include; ➢ Re-pricing of risk assets. ➢ Higher yield environment recorded in Money market and Fixed Income market. ▪ The relati
Slide 17: Profitability
Profitability Comments ▪ Despite the challenging macro economic environment, the H1’2017 result highlights gains from improved operating performance. The drivers include; o Interest income expanded by 25.84% (Y-o-Y) from N20.16 billion (H1’2016) to N25.37 billion as at H1’2017. o Non- Interest incom
Slide 18: Deposits
Deposits Deposits (customer) Deposit Mix (H1’2017) Deposit Mix (2016FY) Savings 17% Current Term 27% 56% Comments Deposit Type (H1’2017) Deposit Type (2016FY) ▪ The high interest rate environment impacted on the Bank’s ability to grow deposits optimally. Deposits recorded a 11.15% decline from Corpo
Slide 19: Loan Portfolio and Analysis
Loan Portfolio and Analysis Breakdown of Loans and Advances Loan Analysis H1’2017 H1’2017 2016FY 6% SECTOR (N'bn) (N'bn) 6% 5% Power and Transportation Energy and Storage Professional, Scientific Agriculture, Forestry & Fishing 3.13 2.26 & Technical Services 5% Capital Market 4.43 5.12 Manufacturing
Slide 20: Asset Quality
Asset Quality Efficient Risk Management culture evidenced by continued NPL low NPL ratio H1’2017 SECTOR % (N'bn) 250 90.00% N'bn Real Estate 0.08 0.79 80.00% Construction 0.05 0.48 200 70.00% Manufacturing 0.52 5.08 General 4.45 43.47 60.00% 150 General Commerce 2.04 19.95 50.00% Power and Gas 0.30
Slide 21: Capital Ratio & Funding
Capital Ratio & Funding Capital Adequacy Ratio Total Regulatory Capital N22.13 billion Total Risk Weighted Assets N174.14 billion Capital Adequacy Ratio 12.71% The minimum capital adequacy ratio for commercial bank with national authorization is 10%. Funding Sources Shareholders' Deposits from fund
Slide 22: Managing Risk
Managing Risk Risk Management remains at the core of our business model Government Remains key to economy Continuing • Weakening of government revenues poses a threat to Challenges in the Oil the fragile economic recovery. and Gas Sector • Despite some respite in the direction of oil prices, market
Slide 23: Key Performance Metrics
Key Performance Metrics H1’2017 2016FY 2015FY 2014FY 2013FY Yield on Assets (%) 15.95 15.65 14.50 14.25 13.62 Net Interest Margin (%) 5.33 6.56 6.92 7.46 5.98 Loan to Deposit Ratio (%) 81.72 80.12 65.59 57.65 47.02 Cost to Income Ratio (%) 89.30 88.32 88.49 87.72 95.15 Coverage Ratio (%) 101.07 100.
Slide 24: Section 3: Outlook & Strategy
Outlook & Strategy Section 3 2017 Outlook 25 Guidance 26 Appendix 28 2017 Half Year Result Presentation to Analysts & Investors Slide No. 24
Slide 25: 2017 Outlook
2017 Outlook Global Economy Domestic Economy Domestic Market • The economy records expansion given PMI • Uncertainty expected to characterise the • Foreign exchange liquidity might be data. However, political risk alongside U.S and UK, arising from new releases of impacted by global energy markets.
Slide 26: Guidance
Guidance Customer Deposit Retail Penetration Loan Growth growth (Personal Accounts – share of Deposit) 2016FY 2016FY 2016FY -0.58% 12.54% 22.31% 2017E 2017E 2017E 5% 15% 1%-2% COMMENTS COMMENTS COMMENTS Deposit growth expected from continued Improved retail volumes from campus Loan growth to slow as
Slide 27: Thank You
Thank You VALUE-DRIVEN RELATIONSHIP BANKING Since 1945 2017 Half Year Result Presentation to Analysts & Investors Slide No. 27
Slide 28: History
History Fully repositioned … in pursuit of growth 2017 Half Year Result Presentation to Analysts & Investors Slide No. 28
Slide 29: The Board
The Board In the course of the year, the following changes were made to the Board • Mr. Babatunde Kasali (wef. May 2017) joined the Board as Chairman, replacing Mr. Adeyinka Asekun . • Ademola Adebise (wef. January 2017) was appointed Deputy Managing Director. 2017 Half Year Result Presentation to A
Slide 30: Nigeria's 1st Digital Bank
Nigeria’s 1st Digital Bank You Don’t Need a Bank Branch • Schedule recurring payments and forget about it. This includes transfers, bills payments etc. • Carry out Easy Transfers • Buy Airtime • Buy Data • … Do much more! 2017 Half Year Result Presentation to Analysts & Investors Slide No. 30
Slide 31: Digital Product Offerings
Digital Product Offerings WemaOnline A web based application which provides real time access to account holders. WemaDebit & (MasterCard, Visa, Verve, Interswitch) partnership with global and domestic card issuers ensures seamless payments to our customers and non-customers Credit Cards WemaMobile A
Slide 32: Cautionary Note
Cautionary Note • This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the transactions described in this presentati