ACCESS BANK PLC 2015 Rights Issue February 2015
Agenda Overview of Access Bank Rights Issue Rationale 2015 ACCESS BANK PLC 1
Recognised as a leading commercial bank in Nigeria with an extensive distribution network in Sub Saharan Africa and the UK Access Bank Plc. is licensed by the Central Bank of Nigeria as an International Bank Listings Nigerian Stock Exchange London Stock Exchange (Eurobond) Awards & Recognition 366 Branches Channels 1,042 ATMs 11,846 POS Best Credit Card Product Award 2014 Risk Management Award 2013 African Banker s Award 2013 M&A Winner in Africa 2012 FT/IFC Sustainable Bank of the Year 2011 Capital Adequacy Ratio 20% Subsidiaries 7 Banking Subsidiaries Number of Employees 3,192 Professional staff Issuer Credit Rating 1 A+ AA- A- A+ 1. Quoted ratings represent the Bank s Long Term Local Ratings Long Term Counterparty Ratings are as follows: S & P: BB- Fitch: B 2015 ACCESS BANK PLC 2
Our growth story reflects our commitment to execute our strategy and consistent delivery on our promise 2002 2007 2012 65 th out of 89 banks 90,000 customers ROE: -0.9% CIR: 93% Gross Income: 2.6bn Loans: 4.2bn Deposits: 6.5bn Assets: 11.3bn No Risk Rating Market Cap: 25bn Number of Branches: 32 9 th out of 25 banks 600,000 customers ROE: 25% CIR: 62% Gross Income: 27.9bn Loans: 108bn Deposits: 205bn Assets: 409bn Risk Ratings: S&P: BBB Fitch: BBB Agusto: A- Market Cap: 342bn Number of Branches:118 5 th out of 21 banks 6.5 million customers ROE:18% CIR: 61% Gross Income: 208.3bn Loans: 609bn Deposits: 1,201bn Assets: 1,745bn Risk Ratings: S&P: AA- Fitch: A- Agusto: A- Market Cap: 241bn Number of Branches: 349 1st 5-Year Plan 2nd 5-Year Plan 15 billion Public Offer in 2004 Issued 11.9 billion of Local Bond in 2006 136 billion Public Offer in 2007 Issued USD350 million Eurobond in 2012 2014 ACCESS BANK PLC 3
Strong financial performance reflecting our well executed strategy (1) Strong Loan Growth Solid Funding Base 92% 448 52% 50% 576 604 59% 786 71% 1,056 2010 2011 2012 2013 9m'14 Net loans (N bn) CAGR 10-9m14 25.7% CAGR 10-9m14 34.6% The Bank maintained strong Net loans / Deposits 61% 485 77% 80% 84% 82% 1,102 1,201 1,331 1,479 2010 2011 2012 2013 9m'14 Customer deposits (N bn) Deposits / Total Liabilities loan growth of 33% YoY in 9m 2014 the highest loan growth of its peers in the period Asset quality remained strong with the NPL ratio continuing its steady decline Improving Asset Quality 110% 85% 60% 11.0% 9.0% 5.0% 122% 114% 2.7% 2.5% Compelling Shareholder Returns 18.2% 18.7% 14.9% 8.6% 4.8% 241 244 265 192 164 Consistent improvement in shareholders returns as ROE increased from 4.8% in 2010 to 18.7% in Q3 14 Solid funding base with customers deposits accounting for 82% of total liabilities 2010 2011 2012 2013 9m'14 2010 2011 2012 2013 9m'14 NPL ratio NPL coverage Shareholders' equity ROAE 2015 ACCESS BANK PLC 4
Strong financial performance reflecting our well executed strategy (2) Increasing Margins High Share of Non-Interest Income 12.3% 11.7% 10.7% 11% 7.7% 6.6% 6.9% 5.5% 5% 4.9% 4.5% 4% 13.2% 7.5% 4.9% 32.4% 44.2% 43.9% 41.1% 39.5% Strong loan growth has driven a significant increase in the Bank s asset yield and net interest margin FY'12 H1'13 FY'13 H1'14 9M'14 Cost of Fund Asset Yield NIM Steadily Improving Efficiency FY'12 H1'13 FY'13 H1'14 9M'14 Compelling Returns Non-Interest Income / Operating Income The Bank maintains one of the highest share of non-interest revenues in the sector 3% 2.7% 2.2% 3% 2.9% 61% 68% 66.4% 63.1% 61.2% 18% 17% 15.5% 18% 18.7% Efficiency has steadily improved since FY 13, with a Cost-to-Income Ratio (CIR) of 61.2% in 9M 14 FY'12 H1'13 FY'13 H1'14 9M'14 FY'12 H1'13 FY'13 H1'14 9M'14 Cost-to-Income Ratio ROAE ROAA 2015 ACCESS BANK PLC 5
Our corporate history is a testament to our disciplined capital planning With a vision of becoming one of the most respected banks in Africa, Access Bank has grown to be a Top Five Bank in Nigeria Raised 15bn in public issues to meet capital requirements Successful acquisition of Capital and Marina bank FMO becomes largest institutional investor through conversion of $15m term loan Raised 136bn in public offerings including a highly successful and over-subscribed GDR Access Bank UK is established Awarded IFC Sustainable Bank of the Year Acquisition of Intercontinental Bank Ranked fourth largest bank as a result of the acquisition Credit rating 1 : S&P: AA- Fitch: A- Agusto: A+ GCR: A+ 2002 2005 2006 2007 2009 2011 2012 2013 2014 2018 Appointment of Aigboje Aig-Imoukede as MD/CEO and Herbert Wigwe as DMD Embarked on a 5 year transformation agenda Local bond issue of 11.9bn Passed CBN s Special Audit on Governance, Liquidity and Capital Adequacy $150million loan stock from Development Finance partners $350mn Eurobond Merger with Intercontinental Completed Post-merger integration Divestment from Non- Banking Subsidiaries Designated as SiFi by CBN Appointment of Herbert Wigwe to succeed retiring MD/CEO and appointment of Obinna Nwosu as DMD Issued USD400 million subordinated note Transition into large diversified banking institution 1st 5-Year Rolling Plan 2nd 5-Year Rolling Plan 3rd 5-Year Rolling Plan Source: Bank financial reports and published unaudited management presentations. (1) Long term local rating 2015 ACCESS BANK PLC 6
Agenda Overview of Access Bank Rights Issue Rationale 2015 ACCESS BANK PLC 7
Transaction Summary Issuer Use of Proceeds Now being issued Issue Size Method of Issue Provisional Allotment Access Bank PLC The funds raised will be used to upgrade the Bank s information technology platforms and branch network to enable it provide better service and further improve the working environment as well as improve its distribution channel infrastructure to enable it provide more efficient services to clients. The funds will also be used to augment the Bank s working capital and support risk assets growth Offer size of 7,627,639,636 (Seven billion, Six hundred and Twenty Seven million, Six Hundred and Thirty Nine thousand, Six hundred and Thirty Six) ordinary shares of 50 kobo each N52.6 billion By way of rights to existing shareholders One (1) ordinary share for every three (3) fully paid ordinary shares held by shareholders of the Bank. Issue Price per Share N6.90 Payment In full acceptance Opening Date January 26, 2015 Closing Date March 4, 2015 Underwriting At the instance of the issuer, this issue is not underwritten 2015 ACCESS BANK PLC 8
With significant market opportunities in sight, our focused growth strategy would require us to proactively enhance our capital Enhance Capital Strength Comprehensively strengthening capital ratios for the longer term Sufficient headroom to grow the business and deliver sustainable growth in targeted sectors Pursue growth in asset book to drive profitability while maintaining the Bank s moderate risk appetite Digitisation and Improvement of the retail channel network pivotal to customer acquisition and retention Build a strong buffer for regulatory requirements Access Bank s Growth Strategy Become the World s Most Respected African Bank Achieve top 3 position by all financial metrics Outstanding customer experience across all segments Deployment of analytics and behavioral segmentation to prioritize customer needs Sustained and disciplined growth in chosen markets Expanded and diversified retail deposit base Continued extension of our Value Chain Strategy leveraging on a strong technology platform Global brand recognition for excellence Delivering superior shareholder value requires the enhancement of our Tier 1 Capital 2014 ACCESS BANK PLC 9
Target Price ( ) Strong analysts endorsement with an average target price of 1.1x book value Relative Share Performance 1 120 100 80 60 40 20 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 16 14 12 10 Access GTB FBNH Zenith UBA Latest Broker Recommendations 14.00 12.95 12.89 Commentary 12.30 12.20 11.84 Median Target Price: 11.84 Market prices of securities on The Nigerian Stock Exchange have dipped significantly and in many cases do not necessarily represent the true value of such listed companies Global Macro concerns regarding oil trading dynamics and domestic currency volatility have led to significant capital flight from the equities markets Access Bank s share price is currently well below book and intrinsic value Underperforming versus the NSE ASI year to date, but has outperformed many Tier 1 peers Current market price of 4.99 values the company at c.0.44x book value of equity Rights Price of 6.90 represents a P/BV of 0.61x and a P/E of 2.6x, still a significant discount to the Bank s intrinsic value and an attractive entry price for long term investors 11.40 11.31 10.82 Key Points Average broker consensus is a buy with a target price of 11.84 Stock is currently trading at a 126% discount to the broker consensus target price 10.40 10.36 8 6 4 2 0 Exotix BPI BGL FBN Capital ARM Chapel Hill Imara RenCap CardinalStone Vetiva SBG Securities 2014 ACCESS BANK PLC Source: Capital IQ, Bloomberg, Standard Bank analysis as of 12 September 2014 Note: Banks Index is composed of Access, FBN, GTB, Zenith, UBA, Diamond, Stanbic, Skye, Fidelity, and FCMB 10 *Unity Bank share price at RI announcement was 50 Kobo. Nigerian regulations disallow trading at a discount to the nominal value of shares