Stanbic IBTC Holdings PLC ( Stanbic IBTC )

Transcription

1 Stanbic IBTC Holdings PLC ( Stanbic IBTC ) FY 2017 Results Presentation March 2018 Stanbic IBTC Presentation / page 1 /

2 Contents Section Page 1. Stanbic IBTC and its operating environment 3 2. Financial results FY Business unit results Outlook for Appendix 41 Stanbic IBTC Presentation / page 2 /

3 Stanbic IBTC and its operating environment Yinka Sanni Chief Executive, Stanbic IBTC Holdings PLC

4 About Stanbic IBTC Holdings PLC Stanbic IBTC is a financial institution in Nigeria that offers end-to-end financial services through a three-pronged structure: Corporate and Investment Banking, Personal and Business Banking and Wealth Management. Stanbic IBTC is 53.07% owned by Standard Bank Group and draws on the deep resources within the Standard Bank Group and emerged from the merger of Stanbic Bank Nigeria Limited with IBTC Chartered Bank PLC in Key focus areas We want to do valuable things for clients Customer Centricity Universal Financial Service Organization (UFSO) Delivering a seamless universal financial services proposition During the year, our business divisions achieved strong operating results and we retained our market leadership across our various businesses such as global markets, investment banking, pension, stockbroking, asset management and custodial services with several accolades received during the year. The Group remains committed to delivering end-to-end financial solutions to our esteemed customers. Strategic Value Drivers Digitization Via digital platforms while exploring new technologies Fitch retained our AAA national ratings which reaffirms our strong fundamentals, stability, credit worthiness and low relative risk in the Nigerian financial markets. Stanbic IBTC Presentation / page 4 /

5 Strategic Objectives Vision To be the leading end-toend financial solutions provider in Nigeria through innovative and customer focused people. Stanbic IBTC Presentation / page 5 / Operating Platform: ensure our processes and infrastructure are scalable and customer-focused People: ensure our people are accountable, passionate and engaged Customer Service: deliver exceptional service and delight our customers Strategic Objectives Brand: establish a differentiated and well recognized brand in Nigeria Volumes/ Cost: achieve volumes while managing costs End-to-end selling: ensure we provide end-to-end solutions to our customers. Mission Committed to solutions that drive your progress.

6 Moderately improving operating environment The continuous rise in average oil price ($64.22 as at December 2017) and increased production volumes as a result of peace in the Niger Delta region have helped stabilize our external Foreign Exchange ( FX ) reserves (Dec. 2017: $38.73bn), despite the Central Bank stepping up its FX interventions prior to the introduction of the Investors & Exporters Foreign Exchange ( IEFX ) window in April US$ billions Movement in external reserves US$ Crude oil price movement (monthly average) Crude oil prices initially dropped below USD48 pbl on the back of oversupply concerns. However, prices have risen steadily to above USD60 pbl due to efforts taken by both OPEC and non-opec members to cap supply. Headline inflation declined to 15.37% in December 2017 (December 2016: 18.55%) due to a decrease in food inflation, making it the eleventh consecutive month of easing inflation in Average inflation for the year closed at 16.5% year-on-year (2016: 15.6%). Stanbic IBTC Presentation / page 6 / % Reserves (US$ billions) Headline inflation Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 *December 2017 Inflation forecast: Standard Bank Research

7 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 NGN / USD rate Moderately improving operating environment The IEFX window remains the most liquid segment of the FX market, with around USD25.5bn traded as at December Most market participants, including those involved in portfolio flows, payments for services, dividend payments as well as demand for the imports of finished goods continue to transact in the window. Rates ranged between N320 and N375 at this window Exchange rate movement The yield curve is bull-flattening at the short end, with the 3-year bond yielding 14.1% compared with the 14.9% 1-year T-bill yield, and we see no imminent easing of the policy stance by the CBN. In fact, we expect that the CBN will continue to sterilize NGN via a combination of Open Market Operations (OMOs) as well as requiring pre-funding for bids at the CBN s retail and wholesale SMIS window. The tight monetary stance is not expected to change until inflation subsides further. Stanbic IBTC Presentation / page 7 / 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% CBN Parallel market NIFEX NAFEX I&E FX Window Interest rate movement Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Average inter-bank call rate Tbills - 86 days Tbills days Tbills days Bond - 3 year

8 Financial Result FY 2017 Victor Yeboah-Manu Chief Financial Officer, Stanbic IBTC Holdings PLC

9 Summary of FY 2017 performance Interest Income grew by 41% to N122.9bn Fees and Commission revenue up by 12% to N59.4bn Interest expense was up by 33% to N39.3bn Fees and Commission expenses declined by 55% to N341mn Gross Earnings grew by 36% to N212.4bn Total Expenses grew by 27% to N151.3bn Profit Before Tax grew by 64% to N61.2bn Trading revenue grew by 90% to N29.1bn Other revenue grew by 32% to N945mn Credit Impairment rose by 29% to N25.6bn Operating expenses grew by 25% to N86.0bn Stanbic IBTC Presentation / page 9 /

10 Summary of FY 2017 performance Customer Loan Increased slightly by 5% to N372bn Shareholders Fund Increased by 33% to N182.1bn. Financial Investment Grew by 25% to N316.6bn Customer Deposit Grew by 34% to N753.6bn 25% Trading Assets Grew by >100% to N151.5bn Total Liabilities Up by 32% to N1,201bn (FY 2016: N912.7bn) Total Assets Up to N1.39trn (FY 2016: N1.05trn) Capital Adequacy Ratio Group 23.5% (FY 2016: 22.8%) Bank: 20.5% (FY 2016: 21.0%) Stanbic IBTC Presentation / page 10 /

11 Key ratios PAT increase was driven by significant growth in both interest income and noninterest revenue thereby causing a year-onyear growth in RoAE. 5.9% 54.8% 5.0% 18.9% The 90% trading revenue growth was largely impacted by increased FX availability via the IEFX window and improved demand of fixed income and money market asset which subsequently led to trading asset growth. Credit impairment charges increased as we continued our clean-up of the risk asset portfolio. Net Interest Margin 6.9% Cost to Income 49.8% Credit Loss Ratio 6.6% RoAE 28.9% Cost-to-income ratio improved as we continue to improve the efficiency of our operations and the excellent growth recorded in total income. 2.5% 59.1% 246k 5.0% Though the economy is out of recession and business activities are improving gradually, we remain cautious with our lending which saw our customer loans (net) increased slightly. Return on Asset 3.8% Liquidity Ratio (Bank) 102.3% Basic EPS 460k NPL Ratio (IFRS) 7.9% Stanbic IBTC Presentation / page 11 / FY 2017 FY 2016

12 Overview of income statement for FY 2017 Nmillion Income Statement 25, , Balance sheet39,324 86, ,911 12, Key ratios 61,166 48,381 0 Interest income Interest expense Non-interest revenue Credit impairment charges Operating expenses Profit before taxation Taxes Profit after taxation Stanbic IBTC Presentation / page 12 /

13 Income statement - NII Net interest income was up by 44% as interest income increased by 41% to N122.9 billion (2016: N87.5billion) largely due to growth in income from investment securities despite a 33% growth in interest expense. Consequently, net interest margin improved as a result of increase in asset yields, which was on the back of higher yields on investment securities that contributed to the growth in interest income. Cost of funds increased on account of growth in interest expense resulting from increase in customer deposits. Stanbic IBTC Presentation / page 13 / Balance sheet Nmillion Evolution of net interest income 100, % 8.0% 5.5% 5.9% 80, % 4.7% 6.0% 60, % 4.5% 4.8% 4.0% 40, % 3.9% 20, % 37,013 46,658 47,716 57,859 83, % Net Interest income Net interest margin before impairment charges Net interest margin after impairment charges Drivers of net interest income (%) Asset yield Cost of funds Net interest margin 100% 80% 60% 40% 20% 0% Breakdown of interest income 5% 5% 3% 1% 2% 31% 31% 64% 63% 25% 36% 72% 63% 48% 50% Loans and advances Investment securities Placements

14 Income statement - NIR Non-interest revenue grew by 31% driven by a 90% increase in trading income and 13% growth in net fees and commission. Growth in trading revenue was driven by increased income from foreign exchange and fixed income transactions, both growing by over 78% and over 100% respectively following the CBN s continued introduction of initiatives to increase FX liquidity and customer activity. Our capital market businesses also witnessed improved business patronage which contributed to the growth in non-interest revenue. Nmillion 100,000 80,000 60,000 40,000 20,000 - Evolution of non-interest revenue 57% 55% 56% 48,219 57,987 56,788 68,194 89,182 Breakdown of non-interest revenue by type 54% 52% Non-interest revenue % of total income Other revenue 1% Trading revenue 33% Fees & commisions 66% Trading revenue 22% Other revenue 1% 60% 55% 50% 45% 40% Fees & commisions 77% Stanbic IBTC Presentation / page 14 /

15 Income statement - credit impairment Credit impairment charges increased by 29% to N25.6 billion from N19.8 billion in 2016 as a result of additional provisioning for bad & doubtful loans. Credit loss ratio worsened to 6.6% as additional credit impairment charges were raised in line with efforts to accelerate the write-off of delinquent facilities. Stanbic IBTC Presentation / page 15 / Credit impairment charges trend Nmillion % , , , , , , ,502 2,922 3, ,000 12,009 15,925 25, (5,000) (285) (254) Credit impairment charge on non-performing loans Credit loss ratio Movement in credit impairment charges Credit impairment charge on performing loans change % Nmillion Nmillion Specific credit impairment charges 72 28,235 16,394 Provision for performing loans >(100) (254) 3,878 Total impairment charges 38 27,981 20,272 Recoveries >100 (2,404) (469) Credit impairment charges 29 25,577 19,803

16 Income statement operating expenses Operating expenses increased by 25% yearon-year. Staff cost was up 20% due to inflation adjustment to staff salaries. Average headcount also increased to ensure adequate manpower to drive our strategy. Other operating expenses increased by 28% mainly as a result of growth in provision for potential exposures, information technology expenses and sundry expenses. Cost-to-income ratio improved to 49.8% from 54.8% recorded in prior year as we continue to maintain a higher growth in total income compared to cost growth. Effective tax rate declined to 20.9% from 23.4% year-on-year although the tax payable increased YoY as profit grew. Stanbic IBTC Presentation / page 16 / Nmillion 100,000 80,000 60,000 40,000 20,000 - Nmillion 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Operating expenses and cost-to-income ratio 68.0% 55.3% 57,948 57,901 62,066 69,041 86,026 Taxation and effective tax rate 61.7% 54.8% 49.8% Operating expenses (N'm) Cost-to -income ratio 15.6% 20.8% 20.1% 23.4% 20.9% 3,844 9,068 4,760 8,689 12, Taxation Effective tax rate 70.0% 60.0% 50.0% 40.0% 30.0% 25.0% 20.0% 15.0% 10.0%

17 Balance sheet - Total assets Total assets mix Total assets and ROA trend 100% 80% 60% 16% 20% 20% 38% 42% 38% 40% 24% 18% 23% 17% 22% 20% 28% 25% 30% 30% 16% 0% Others Loans & advances to customers Financial investments Cash & loans to banks 12% 34% 21% 27% 1,600 1, % 3.7% 1.7% 2.5% 3.8% ,054 1, Total assets Return on assets 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Breakdown of total assets Nmillion 1,600,000 1,200, , , ,386, ,971 Total Assets Cash & loans to bank Trading and derivative assets 162,531 43, ,641 Pledged assets Financial investments Loans & advances to customers 372,088 58,457 Other assets 22,488 Intangible assets, property & equipment Stanbic IBTC Presentation / page 17 /

18 Balance sheet Loans and advances Gross loans portfolio has grown slightly by 7.6% year-to-date due to cautious lending approach. Installment sales, finance leases and mortgage loans declined as a result of maturities in the year. Increase in overdraft and term loans was due to a review of risk appetite considering the current economic situation. Stanbic IBTC Presentation / page 18 / Nbillion Loans and advances trend Contribution to loans and advances by product 375,316 Gross loans and advances - FY 2016 (1,498) Mortgage lending (3,751) Installment sales and finance leases 3,314 30, ,853 Overdrafts Term loans Gross loans and advances - FY 2017 Gross loans and advances by currency LCY loans FCY loans Total loans Nmillion Nmillion Nmillion Personal & Business Banking 123,367 25, ,324 Mortgage 7,426-7,426 Instalment sale & finance leases 11, ,167 Overdrafts 21,203 2,552 23,756 Term loans 83,340 22, ,975 Corporate & Investment Banking 94, , ,528 Term loans 66, , ,145 Overdrafts 27,030-27,030 Instalment sale and finance lease 1,353-1,353 Total loans 218, , ,852 Percentage (%) 54% 46% 100%

19 Balance sheet Loans and advances Breakdown of loans by sector FY 2017 FY 2016 Oil & gas services 1% Oil & gas downstream 8% Transportation & communication 4% Oil & gas Upstream 11% Agriculture 6% Construction and real estate 11% Consumer credit 13% Oil & gas services 2% Oil & gas downstream 8% Transportation & communication 9% Oil & gas Upstream 8% Agriculture 8% Construction and real estate 10% Consumer credit 14% Manufacturing 31% General commerce 9% Finance & Insurance <1% Manufacturing 27% General commerce 10% Finance & Insurance <1% Government 6% Government 4% Stanbic IBTC Presentation / page 19 /

20 Balance sheet Loan performance The non-performing loans increased to N31.7 billion (2016: N18.7 billion) The main driver of the increase in NPL was the classification of some corporate clients in construction & real estate, oil & gas downstream and transportation & communication. We believe the loans will be resolved soon and our NPL ratio will decline accordingly. Consequently, NPL ratio is; IFRS 7.9% (FY 2016: 5.0%). Prudential guidelines 8.6% (FY 2016: 6.3%). NPL coverage ratio is 66.0% (FY 2016: 60.2%) Stanbic IBTC Presentation / page 20 / N billion Non-performing loans and NPL ratio (IFRS) 4.4% 4.3% 7.1% 5.0% 7.9% Non-performing loans Non-performing loans by currency (N million) (IFRS) 2017 NPL/ total loans % of total NPLs % 6.0% 4.0% 2.0% 0.0% % of total NPLs Local currency 22,256 70% 16,096 76% Foreign currency 9,457 30% 2,579 24% Total NPLs 31, % 18, % Non-performing loans ratio by sector (IFRS) Sector % of Total NPL NPL ratio (%) % of Total NPL NPL ratio (%) Agriculture 4.7% 6.0% 16.7% 10.6% Construction and real estate 5.6% 4.2% 1.7% 0.8% Consumer credit 20.7% 12.9% 23.1% 8.2% General commerce 5.2% 4.5% 13.0% 6.4% Government 0.5% 0.7% 0.6% 0.8% Manufacturing 0.4% 0.1% 9.2% 1.7% Oil & gas services 1.6% 10.4% 9.4% 21.9% Oil downstream 21.7% 21.0% 1.9% 1.2% Transportation & communication 39.6% 27.2% 24.2% 15.9% Grand Total 100.0% 7.9% 100.0% 5.0%

21 Balance sheet Customer deposits Customer deposits grew by 34% to close at N753.6 billion from N561.0 billion in The drive to grow transactional balances resulted in a 15% growth in current account balances, while savings account balances grew by 25% from FY Term deposits increased by 60% which is a major component of our deposit growth and it impacted our deposit mix. The deposit mix declined as CASA ratio was down to 49% as at 2017 from 57% in Stanbic IBTC Presentation / page 21 / Nbillion Customer deposits and CASA ratio 52% 49% 44% 57% Contribution to customer deposits by product 560,969 Customer deposits FY % Deposit liabilities CASA mix 40,917 Current accounts 33,177 9,814 Call deposits Savings accounts 108,765 Term deposits 753,642 Customer deposits FY % 55% 50% 45% 40% Customer deposits by currency LCY deposits Nmillion FCY deposits Total deposits Nmillion Nmillion Personal & Business Banking 266, , ,621 Current Accounts 125, , ,159 Savings Accounts 48,444-48,444 Call Deposits 5,335 1,500 6,834 Fixed Deposits 87,139 49, ,184 Corporate & Investment Banking 227,397 89, ,021 Current accounts 40,954 36,328 77,281 Call deposits 64,852 3,794 68,646 Term deposits 121,591 49, ,094 Total deposits 494, , ,642 Percentage (%) 66% 34% 100%

22 Balance sheet Capital and liquidity The group maintained adequate capital with total capital adequacy ratio at 23.5% (Bank: 20.5%) which is above the regulatory requirement of 10%. The group s balance sheet was funded mainly by deposits from customers which accounted for 54% of total assets. The group s liquidity ratio closed at 115.4% (Bank: 102.3%) against a regulatory minimum of 30%. Nbillion (100) 2017 Risk weighted assets and capital adequacy ratio Trading liabilities 5% Deposits from banks 4% 24.5% 22.0% 20.4% 21.3% 17.1% 17.4% Breakdown of balance sheet funding 22.8% 23.5% 18.6% 19.6% % Risk weighted assets Tier I capital ratio Total capital ratio Statutory minimum Borrowings Other liabilities 16% Equity 13% 7% 2016 Deposits from customers 54% Trading liabilities 1% Deposits from banks 5% Borrowings 12% Other liabilities 16% Equity 13% 25.0% 20.0% 15.0% 10.0% 5.0% Deposits from customers 53% Stanbic IBTC Presentation / page 22 /

23 Balance sheet Shareholder value The increase in profitability impacted positively on ROAE resulting in an increase to 28.9% from 18.9% achieved in FY The price-to-book ratio appreciated on account of increased share price resulting from the renewed investor confidence in Stanbic IBTC. 30.0% 20.0% 10.0% 0.0% Return on average equity 20.5% 29.6% 12.9% 18.9% 28.9% Return on Equity Consequently, Stanbic IBTC s market capitalization grew significantly during the period due to the share price appreciation kobo 2,000 1,600 1,200 Net assets value per share and price-to-book ratio Times Nbillion Market capitalisation Stanbic IBTC Presentation / page 23 / ,160 1,237 1,371 1, Net asset value per share Price- to- book

24 Personal & Business Banking ( PBB ) Babatunde Macaulay Executive Director, Stanbic IBTC Bank

25 PBB Highlight Flat Total Income N44.3billion 2% Gross loans & advances N149.3billion Cost to Income 99.9% (FY 2016: 82.4%) 10% Non-Interest Revenue N13.0billion 24% Deposit liabilities N436.6billion Credit loss ratio 9.9% (FY 2016: 6.0%) 4% Net Interest Income N31.2billion 9% Non-performing loans N16.9billion NPL Ratio 11.4% (FY 2016: 12.3%) >100% Profit Before Tax (N14.9billion) 58% Credit Impairment N15.0billion RoE (69.4%) (FY 2016: (5.6%)) Cost of Fund 2.9% as at Dec 2017 CASA Ratio 67% as at Dec 2017 Stanbic IBTC Presentation / page 25 / Increased declined

26 PBB Highlight Steady growth in customer deposits Growth in customer numbers 500, , , , , , , , , , , , ,316 2,000,000 1,600,000 1,200,000 1,149,537 1,177,391 1,228,347 1,291,639 1,747,784 1,665,954 1,593,361 1,521,136 1,421,115 1,361, , , , ,000 - Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q CASA Trend 5.00% 300, % 3.00% 2.00% 4.79% 4.01% 4.00% 3.8% 3.50% 3.50% 3% 3% 3% 2.8% 200, , % 0.00% Stanbic IBTC Presentation / page 26 / 142, , , , , , , , , ,595 Q Q Q Q Q Q Q Q Q Q CASA COF -

27 PBB Highlight Growth in customer acquisition (New to Bank customers) Mobile banking downloads 2% 11% 1% 86% Andriod ios Windows Black Berry Mobile banking downloads 70,956 92, , , , , , , , , , ,613 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Stanbic IBTC Presentation / page 27 /

28 PBB Financial analysis FY 2017 Net Interest Income (NII): The growth in NII was driven by a 29% increase in low cost deposits (y-o-y) which had a positive impact on funding. The NII was also positively impacted by improved yield on interest in loans and advances. Performance highlights FY 2017 Change % FY 2016 Non-Interest Revenue (NIR): The NIR dropped by 10% y-o-y. However, if we adjust for the one-off international card revenues earned last year, it is revealed that NIR has actually increased by 12%, despite regulatory induced reduction in transactional fees in 2017 which impacted revenue downwards between 20% and 30%. Credit impairment charges grew by 58% as a result of deliberate decision to clean up delinquent assets on the book. However, the analysis of 2017 for new loan bookings and new clients shows very good asset quality, implying that the clean up work done on asset quality is yielding fruits. Operating expenses growth is as a result of inflation adjustment to salaries and increased cost of running branches. Loan book declined due to asset quality remediation, maturities and write offs. Given the clean up on the asset book, the business is focused on loan book growth within the acceptable risk criteria. The business is also focused on improving the quality of loans booked, while also focusing on recoveries. Total customer deposits closed at N436billion, which represents a year-on-year increase of 24%. The growth is driven majorly by current and savings accounts (CASA), which grew by 29% year-on-year. CASA ratio closed at 67% as at December 2017 (up from 64% in same period of prior year). Income statement N million N million Net interest income 31, ,964 Non-interest revenue 13,044 (10) 14,512 Credit impairment charges (14,970) 58 (9,504) Operating expenses (44,234) 21 (36,656) Profit / (Loss) before tax (14,917) >100 (1,684) Profit / (Loss) after tax (16,525) >100 (1,613) Balance sheet FY 2017 FY 2016 Total assets 227, ,149 Gross loans & advances 149,324 (2) 152,360 Deposit liabilities 436, ,189 Key ratios FY 2017 FY 2016 Cost-to-income (%) Credit loss ratio (%) Net Interest Margin (%) Stanbic IBTC Presentation / page 28 /

29 PBB Financial analysis Moving forward 2018 Delivering the Client Franchise: The business is focused on harnessing the opportunities in each of the existing commercial banking names, establish the approach to deepen each relationship and fully unlock the value they represent. Building the Personal Bank: The business is focused on growing the number of savings account and would also focus on the youth segment by delivering products and services for this client segment. Building the Virtual Bank: The virtual banking platform shall support several product offering in order to meet the needs of our target customer segment. Africa-China Banking: Our Africa-China banking center has been set-up and is geared for launch. The center is aimed at providing bespoke solutions and addressing the needs of business communities in both Nigeria and China. Stanbic IBTC Presentation / page 29 /

30 Corporate & Investment Banking ( CIB ) Andrew Mashanda Executive Director, Stanbic IBTC Bank

31 CIB Highlight 80% Total Income N89.0billion 14% Gross loans & advances N255billion Cost to Income 33.2% (FY 2016: 45.4%) 62% Non-Interest Revenue N41.1billion 53% Deposit liabilities N317billion Credit loss ratio 4.4% (FY 2016: 4.7%) 98% Net Interest Income N48.0billion >100% Non-performing loans N15.1billion NPL Ratio 5.8% (FY 2016: Nil) >100% Profit Before Tax N48.9billion 3% Credit Impairment N10.6billion RoE 43.6% (FY 2016: 24.9%) Increased declined Stanbic IBTC Presentation / page 31 /

32 CIB Financial analysis FY 2017 Net interest income was up by 98% due to favorable yields on investment securities. The adoption of flexible exchange rate system impacted positively on trading revenue as FX liquidity improved coupled with increased interest in various financial assets. Credit impairment charge was up 3% year-on-year as we continue to work on improving our asset quality. Operating expenses grew by 31%. Management continues to focus on a disciplined approach to cost, to improve efficiency resulting in a decline in cost-toincome ratio to 33.2% (2016: 45.4%). Loan book increased by 14% year-to-date though we still remain cautious in our lending approach. Performance highlights FY 2017 Change % FY 2016 Income statement Nmillion Nmillion Net interest income 47, ,202 Non-interest revenue 41, ,308 Credit impairment charges (10,607) 3 (10,299) Operating expenses (29,556) 31 (22,492) Profit before tax 48,857 >100 16,719 Profit after tax 45,748 >100 14,923 Balance sheet FY 2017 FY 2016 Total assets 1,114, ,060 Gross loans & advances 254, ,956 Deposit liabilities 317, ,780 Key ratios FY 2017 FY 2016 Cost-to-income (%) Credit loss ratio (%) Net Interest Margin (%) Stanbic IBTC Presentation / page 32 /

33 CIB Financial analysis Moving forward 2018 Focus on clients in the Country s GDP growth-focused and resilient sectors. Optimize and grow balance sheet productivity by increasing the quality of the asset book. Continue to protect the asset book and keep NPL ratio below 5%. Grow cheap and sticky deposit liabilities to reduce cost of fund. Grow the fees and commissions sources to drive the NIR line. Seek opportunities that will result from the changing macro-economic environment. Develop new products and services to meet clients needs. Stanbic IBTC Presentation / page 33 /

34 Wealth Eric Fajemisin Chief Executive, Stanbic IBTC Pension Managers Limited

35 Wealth Highlight 23% Total Income N39.5billion 14% 24% Non-Interest Revenue N35.1billion 31% Asset under Management N2.7 trillion Cost to Income 31.0% (FY 2016: 30.9%) 18% Net Interest Income N4.4billion 6% No. of RSAs 1.6 million RoE 61.7% (FY 2016: 36.2%) 23% Profit Before Tax N27.2billion Increased declined Stanbic IBTC Presentation / page 35 /

36 Wealth financial analysis FY 2017 Net interest income grew by 18% on account of higher yields on government and financial investments. Non-interest revenue grew by 24% due to increased revenue from management fees as assets under management continue to grow. Operating expenses grew by 24%, driven by inflationary adjustment to staff salaries, while other operating expenses increased by 18% on the back of increased pension protection levy and marketing expenses. Cost-to-income ratio remained flat at 31.0% at the end of the period from 30.9% recorded in FY AuM continues to grow at double digits. Performance highlights FY 2017 Change % FY 2016 Income statement Nmillion Nmillion Net interest income 4, ,693 Non-interest revenue 35, ,374 Operating expenses (12,236) (24) (9,893) Profit before tax 27, ,174 Profit after tax 19, ,210 Balance sheet FY 2017 FY 2016 Total assets 43,995 (7) 47,317 Assets under management 2,713, ,076,423 Retirement savings accounts (Nos) 1,595, ,508,040 Key ratios FY 2017 FY 2016 Cost to income ratio (%) Stanbic IBTC Presentation / page 36 /

37 Wealth financial analysis Moving forward 2018 We will continue to follow up with employers for pension remittances as it is in the best interest of our clients and plan more employer town hall sessions in 2018 to allow for more direct stakeholder engagement. We will also stay ready for regulatory changes in the pension industry. The trustees business will consolidate on its mandate acquisition drive for lucrative transactions in its attempt to significantly move the dial and earn appreciable income to ensure it meets and exceeds its financial targets. Improved visibility of our Wealth & Investment offering with deliberate collaboration with the group is also expected to improve as we focus more on client centricity so our clients can extract the best value from our universal offering. We will continue in our drive to position the insurance brokerage business as the firm of choice and ensure a mutually beneficial partnership with our key internal and external stakeholders. Stanbic IBTC Presentation / page 37 /

38 Guidance for 2018 Yinka Sanni Chief Executive, Stanbic IBTC Holdings PLC

39 Outlook in 2018 Stanbic IBTC Presentation / page 39 / With oil price on the rise, relative peace in the Niger Delta and increasing oil production coupled with the various tax collection measures by the Federal Government of Nigeria, we are optimistic that the country s economy will continue on a growth trajectory. We are optimistic that we would sustain our 2017 positive performance in On the other hand, we expect inflation rate to gradually decline and interest rates to moderate which should lead to a fall in yields on government securities. We are of the view that headline inflation should moderate to around 13% at the end of We remain optimistic that our NPL ratio will moderate around our 2018 guidance ratio by the end of the financial year. Areas of focus for 2018 financial year remain: Cost efficiency Improving risk asset quality Growing low-cost deposits New product development Client service Key risks to our results are: High cost of risk Low credit growth Rising cost of funds Declining yield on government securities

40 2018 Guidance Vs 2017 Performance FY 2017 Income 2018 Guidance Actual Statement Loan Growth 7.5% - 10% 5% Deposit Growth 20% - 25% 34% Non Performing Loan 5% 7.9% CASA RatioBalance 60% 49% Cost of Risk sheet <5% 6.6% Net Interest Margin >6% 6.9% Cost to Income 50% - 55% 49.8% Return on equity 25% - 30% 28.9% AuM Growth (Wealth) Key 20% - 25% 31% ratios Stanbic IBTC Presentation / page 40 /

41 Stanbic IBTC Presentation / page 41 / Questions & Answers

42 Stanbic IBTC Presentation / page 42 / Appendix

43 About Stanbic IBTC Holdings PLC Incorporated as Investment Banking & Trust Company Limited and commenced operations as a Merchant bank Merged with Stanbic Nigeria and Standard Bank gained control of the combined entity in a US$1bn transaction Obtained Universal Banking Licence in Nigeria Listed on The NSE on 25 April 2005 Merged with Chartered Bank & Regent Bank and changed name to IBTC Chartered Bank PLC Holding Company Structure was adopted. Stanbic IBTC Holdings PLC 99.9% 99.9% 99.9% 88.24% 99.9% Stanbic IBTC Stockbrokers Ltd Stanbic IBTC Asset Management Ltd Stanbic IBTC Capital Ltd Stanbic IBTC Pension Managers Ltd Stanbic IBTC Investments Ltd 75% 99.9% 99.9% 99.9% Stanbic IBTC Insurance Brokers Limited Stanbic IBTC Trustees Ltd Stanbic IBTC Bank Stanbic IBTC Ventures Ltd 99.9% 99.9% Stanbic IBTC Presentation / page 43 / Stanbic IBTC Nominees Nigeria Ltd Stanbic IBTC Bureau De Change Ltd

44 Group income statement Change % N million N million Gross earnings , ,425 Net interest income 44 83,587 57,859 Interest income ,911 87,467 Interest expense 33 (39,324) (29,608) Non-interest revenue 31 89,182 68,194 Net fees and commission revenue 13 59,089 52,154 Fees and commission revenue 12 59,430 52,918 Fees and commission expense (55) (341) (764) Trading revenue 90 29,148 15,326 Other revenue Total income , ,053 Credit impairment charges 29 (25,577) (19,803) Income after credit impairment charges , ,250 Operating expenses 25 (86,026) (69,041) Staff costs 20 (36,282) (30,173) Other operating expenses 28 (49,744) (38,868) Stanbic IBTC Presentation / page 44 / Profit before taxation 64 61,166 37,209 Direct taxation 47 (12,785) (8,689) Profit for the period 70 48,381 28,520

45 Group quarterly income statement Q Q Q Q N million N million N million N million Gross income 58,214 57,022 50,176 47,022 Net interest income 20,640 21,912 22,155 18,880 Interest income 33,227 32,956 29,887 26,841 Interest expense (12,587) (11,044) (7,732) (7,961) Non-interest revenue 24,902 23,991 20,183 20,106 Net fee and commission revenue 15,780 15,416 14,699 13,194 Fee and commission revenue 15,865 15,491 14,805 13,269 Fee and commission expense (85) (75) (106) (75) Trading revenue 8,953 8,229 5,315 6,651 Other revenue Total income 45,542 45,903 42,338 38,986 Credit impairment charges (5,243) (6,381) (10,626) (3,327) Income after credit impairment charges 40,299 39,522 31,712 35,659 Operating expenses (24,783) (23,041) (21,169) (17,033) Staff costs (8,642) (11,148) (9,258) (7,234) Other operating expenses (16,141) (11,893) (11,911) (9,799) Profit before taxation 15,516 16,481 10,543 18,626 Taxation (4,807) (2,921) (2,505) (2,552) Profit for the period 10,709 13,560 8,038 16,074 Stanbic IBTC Presentation / page 45 /

46 Group statement of financial position Assets Change % 2017 Nmillion 2016 Nmillion Equity and liabilities Change % 2017 Nmillion 2016 Nmillion Cash and cash equivalents , ,351 Pledged assets 53 43,240 28,303 Trading assets > ,479 16,855 Derivative assets (23) 11,052 14,317 Financial investments , ,823 Assets held for sale Loans and advances 4 381, ,229 Loans and advances to banks (37) 9,623 15,264 Loans and advances to customers 5 372, ,965 Other assets 26 49,442 39,220 Property and equipment (5) 21,883 22,962 Intangible assets (15) Deferred tax assets 3 8,901 8,638 Total assets 32 1,386,416 1,053,523 Equity , ,798 Equity attributable to ordinary shareholders , ,102 Ordinary share capital 0 5,025 5,000 Ordinary share premium 2 66,945 65,450 Reserves ,090 66,652 Non-controlling interest (15) 3,158 3,696 Liabilities 32 1,201, ,725 Trading liabilities >100 62,449 5,325 Derivative liabilities (78) 2,592 11,788 Deposit and current accounts , ,735 Deposits from banks 15 61,721 53,766 Deposits from customers , ,969 Other borrowings (22) 74,892 96,037 Subordinated debt 4 29,046 27,964 Current tax liabilities 29 12,240 9,508 Deferred tax liabilities > Provisions 23 12,979 10,581 Other liabilities , ,740 Total equity and liabilities 32 1,386,416 1,053,523 Stanbic IBTC Presentation / page 46 /

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48 Disclaimer If you received this document in error, please immediately return the document and other related documents to Standard Bank Group / Stanbic IBTC Holdings PLC. On receipt of this document, you agree to be bound and are deemed to understand that: This presentation is provided to you for information purposes only on the understanding that such information is strictly confidential. This presentation must not be delivered or its contents disclosed to anyone other than the entity (including its employees) to which it is provided and must not be used or reproduced, in whole or part, for any purpose other than for information. This presentation is intended to be a commercial communication and is not to be construed as a recommendation or the constitution or solicitation of an offer for the sale and purchase of any financial product, service, investment or security. The information, investments and/or strategies discussed in this presentation may not be suitable for all investors and where you have any concerns you should approach an investment advisor. We do not accept liability for any loss (direct or consequential) arising from use of this presentation. You must not rely on any communication (written or oral) from us as investment advice, a recommendation to enter into a transaction (which includes the information and explanations related to the terms and conditions of a transaction) or deem it to be an assurance or guarantee as to the expected results of a transaction. Investments discussed in this presentation may fluctuate in price or value over time and past performance is not indicative of future results. While we have taken care in preparing this presentation, we give no representation, warranty or undertaking and accept no responsibility or liability as to the accuracy or completeness of the information set out in this presentation. This presentation does not represent an offer of funding and any facility to be granted in terms of this presentation is subject to us obtaining the requisite internal and external approvals. Our duties and responsibilities do not include tax advisory, legal, regulatory accounting or other specialist or technical advice or services. You must procure and rely on independent assessments and investigations into all matters contemplated in this presentation Standard Bank Group / Stanbic IBTC Holding PLC. All rights reserved. Stanbic IBTC Presentation / page 48 /