financial results presentation - donuts financial results presentation for the year ended 31...

Financial results presentation

for the year ended 31 December 2014

2



Contents

• Operating environment

• 2014 results analysis

• Business segment performance review

• Outlook for 2015

• Q & A

3

Operating Environment

Sola David-Borha CE, Stanbic IBTC Holdings

4



Macroeconomic environment

The pace of growth of Nigerian economy slowed down in the last quarter of 2014 with GDP growth rate of 5.94% from

6.23% in Q3 2014, resulting from decline in economic activities due to the impact of declining crude oil prices.

The impact of declining crude oil prices was also felt on the Naira as the central bank was forced to devalue the currency.

Foreign currency reserves were down 21% year-on-year as at December 2014 to close at $34.4 billion. This decline is

majorly due to the fall in the crude oil price, which is the major source of revenue for the Nigerian government, and

outflow of capital by foreign investors.

The Central Bank of Nigeria in a bid to reduce the pressure on the naira recently closed the Retail Dutch Auction System

(RDAS) and the Wholesale Dutch Auction System (WDAS).

The inflation rate that has remained in single digit territory for the past 24 months, will likely edge upwards as the value of

the Naira continues to depreciate.

The capital market had a bearish performance in 2014 declining by 16.1% due to low investor confidence.

5



Banking industry – Recent events

Regulatory update

Banks started reporting capital adequacy

ratio under Basel II/III;

Dividend policy linking composite risk

rating (CRR) and asset quality to

dividend payout; and

Policy reducing foreign currency

borrowings to 75% of capital from 200%

previously.

Monetary policy changes

NOP currently at 0.5% (down to 0%,

then 0.1% before increase)

MPR currently up to 13% from 12%

CRR on private sector deposits up to

20% from 15%, public sector deposits at

75%.

Impact on Stanbic IBTC

Increased risk weighted assets as more

capital is required for operational and

market risks in addition to credit risk;

Our NPL ratio increased to 6.6%,

although composite risk rating (CRR) is

within recommended limit;

Our current level of foreign currency

borrowings is below 20% of capital,

giving us the opportunity to borrow more

in foreign currency when required.

Minimal impact on foreign exchange

earnings;

Increase in yields from interbank

placement and money market

investments; and

Increase in cost of funds in the last

quarter of 2014. However, net interest

margins increased.

6

FY 2014 results

Arthur Oginga CFO, Stanbic IBTC Holdings

7



Performance against targets for 2014

• Achieved 19% growth in deposits despite the sizeable outflow and further tightening of the CRR

Deposits growth 25%

•Net interest margin of 5.5% was achieved despite the increase in CRR Net interest margin >5%

•Achieved a cost-to-income ratio of 58.6% Cost to income ratio <63%

Return on equity – 25%

•Achieved 36% growth in gross loans and advances

•Growth in major sectors of the economy: agriculture, oil & gas etc.

Loan growth 15%

•NPL ratio of 6.6% due to growth in NPLs occasioned by the high interest environment.

NPL ratio <5%

•Achieved 0.8% in cost of risk, notwithstanding loan growth Cost of risk <1.5%

2014 Target 2014 Achievements

•Achieved a return on equity of 28.7%

8



Good progress resulting in growth in profitability

Income statement

Balance sheet

Key ratios

Gross earnings 130.6 +17% 111.2

Net interest income 46.7 +20% 37.0

Non-interest revenue 57.9 +20% 48.2

Profit before tax 40.1 +63% 24.6

Profit after tax 32.1 +54% 20.8

Total Assets 944.5 +24% 763.0

Gross Loans & Advances 413.4 +36% 303.3

Customer Deposits 494.9 +19% 416.4

Total Shareholders’ Funds 114.3 +17% 97.6

Net interest margin 5.5 4.9

Cost-to-income ratio 58.6 68.0

Capital Adequacy – Group (B2) 19.1 19.9

– Bank (B2) 15.3 15.4

Non-performing loans ratio 6.6 5.2

Return on average equity 28.7 21.0

Cost of Risk 0.8 0.9

EPS (Kobo) 293 186

2014

Nbillion 2013

Nbillion Growth

2014

Nbillion

2013

Nbillion Growth

2014

%

2013

%

9



36% Growth in loan book…..

185.0

266.1 279.5 303.3

413.4

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

2010 2011 2012 2013 2014

Nbillion

303,307

511 3,365 15,343

91,937

413,440

Gross loansand advances

- FY 2013

Mortgagelending

Instalmentalsales and

finance leases

Overdrafts Term loans Gross loansand advances

- FY 2014

Contribution to loan growth by products

Breakdown of loan book by maturity Breakdown of loan book by products and currency

LCY loans FCY loans Total loans

Nmillion Nmillion Nmillion

Personal & Business Banking 151,832 14,559 166,391

Mortgage lending 8,156 - 8,156

Instalment sale & finance leases 22,533 728 23,261

Overdrafts 20,063 1,023 21,086

Term loans 101,081 12,808 113,889

Corporate & Investment Banking 88,730 158,319 247,049

Term loans 53,836 158,314 212,149

Overdrafts 27,778 5 27,783

Instalment sale and finance leases 7,117 - 7,117

Total loans 240,562 172,878 413,440

4% 9%

21%

7%

59%

Demand Within 1 month Within 6 months

Within 12 months After 12 months

10



36% Growth in loan book….. Breakdown of loan book by sectors

2014

Agriculture 7%

Construction and real estate

6% Electricity & other

utilities 3%

Finance & Insurance

2%

Consumer credit 16%

Manufacturing 21% Upstream Oil &

Gas 5%

Downstream Oil & Gas 5%

Oil & gas services 9%

General commerce

11%

Transportation & communication

14%

Government 1%

2013 Agriculture

4% Construction and

real estate 5%

Electricity & other utilities

3%

Finance & Insurance

3%

Consumer credit 18%

Manufacturing 18%

Upstream Oil & Gas 8%

Downstream Oil & Gas

3%

Oil & gas services

8%

General commerce

15%

Transportation & communication

14%

Government 1%

Well diversified portfolio focused on growth sectors of

the economy.

Gross loans increased 36% benefitting from growth in

lending to the following sectors Oil and gas up 45% YoY

Agriculture up more than 100% YoY

Consumer credit up 20% YoY

Construction and real estate up 68% YoY

Manufacturing up 52% YoY

Transport & communication up 39% YoY

Oil and gas accounted for 19% of gross loans &

advances. We supported notable names in the

upstream, downstream and services subsectors.

Stress test on oil and gas upstream exposures reveal

a breakeven price of between $40 - $43 per barrel

Foreign currency loans accounted for 48% of gross

loans in 2014 (2013: 34%), while revaluation of foreign

currency loans contributed 7% to loan growth in 2014.

Term loans increased by N92 billion and accounts for

79% of gross loans and advances with potential

increase in annuity income.

11



Increased NPL ratio due to growth in non-performing loans Non-performing loans and NPL ratio

12.8

16.6 14.3

15.8

27.7 7.0%

6.2% 5.1% 5.2%

6.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

-

5.0

10.0

15.0

20.0

25.0

30.0

2010 2011 2012 2013 2014

Non-performing loans NPL/ total loans

Nmillion

Non-performing loans by sector

Non-performing loans grew by 76% to N27.7 billion

(2013: N15.8 billion). The growth is due to newly

classified loans majorly from the power and

infrastructure sector.

NPLs for 2014 and 2013 were reported based on

Central Bank’s prudential guidelines.

NPLs in the Transportation & Communication sector

includes loans to distributors of telecommunication

companies and vehicle lease to group commercial

transporters.

Non-performing loans to total loans ratio deteriorated to

6.6% (2013: 5.2%) due to the increase in NPLs.

2013 2014

Agriculture 2%


10%

Consumer credit 12%


30%

Manufacturing 6%


2%

Oil & gas services

1%

General commerce

17%

Transportation &

communication 20%

Agriculture 15%


16%

Consumer credit 19%


0% Manufacturing

8%


1%

Oil & gas services

1%

General commerce

33%

Transportation &

communication 7%

12



Deposits up 19% with over 400,000 new customers Deposits evolution

Breakdown of customer deposits by maturity

54%

19%

20%

7%

Demand Within 1 month Within 6 months

Within 12 months After 12 months

416,352

20,944 10,249 2,354 60,600 4,934

494,935

CustomerdepositsFY2013

Currentaccounts

Calldeposits

Savingsaccounts

Termdeposits

Negotiablecertificateof deposit

CustomerdepositsFY2014

Contribution to deposit growth by products

186.1 287.2 355.4 416.4 494.9

23%

40%

43%

52%

49%

0%

10%

20%

30%

40%

50%

60%

-

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

2010 2011 2012 2013 2014

Deposit liabilities CASA mix

Nbillion Customer deposits grew by 19% supported by customer

growth of over 400,000.

Customer growth is on the back of acquisition initiatives

implemented during the year focusing on customers with

regular flow of income.

High inflow of current accounts was recorded in the first half

of 2014 resulting in lower cost of funds.

PBB deposits grew by 7% due to the reduction in public

sector deposits, while CIB deposits increased by 30%

enjoying flows from capital raising for clients and term

deposits from large institutional customers

13



Well capitalised and liquid balance sheet

Equity 13%

Deposits from customers

55% Deposits from banks

6%

Trading liabilities

9%

Other liabilities

9%

Borrowings 8%

Breakdown of funding sources

N15.5 billion of tier 2 capital was raised in 3Q 2014

to support working capital and business

expansion.

Implementation of Basel II/III increased risk

weighted assets which was evenly matched by our

qualifying capital to ensure our capital adequacy

remains well above minimum requirement of 10%.

We intend to raise further capital, depending on

market realities, in 2015 to ensure we keep

adequate capital to support our asset growth rate.

We maintained a strong liquidity ratio of 56.6%

(Bank 50.8%)

Group Bank Group Bank

2014 2013

Nmillion Nmillion Nmillion Nmillion

Tier I capital 104,011 72,471 88,990 62,356

Tier II capital 21,511 21,354 6,615 6,403

Total qualifying capital 125,522 93,825 95,605 68,759

Credit risk 526,320 509,846 374,174 359,174

Operational risk 129,931 99,637 104,050 84,392

Market risk 2,336 2,336 3,393 3,393

Risk weighted assets 658,587 611,819 481,617 446,959

Capital adequacy

Tier I 15.8% 11.8% 18.5% 14.0%

Tier II 3.3% 3.5% 1.4% 1.4%

Total 19.1% 15.3% 19.9% 15.4%

Capital adequacy computation – Basel II

Risk weighted assets to total assets

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

-

100

200

300

400

500

600

700

800

900

1,000

2010 2011 2012 2013 2014

Total assets Risk weighted assets % of risk weighted assets to total assets

Nbillion

14



Increase in shareholder value

77%

25%

120%

43% 43%

0%

20%

40%

60%

80%

100%

120%

140%

0

50

100

150

200

250

300

350

2010 2011 2012* 2013 2014

Dividend per share Earnings per share

kobo

464 436 857 943 1,101

2.0 1.9

1.3

2.2

2.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

200

400

600

800

1,000

1,200

2010 2011 2012 2013 2014

Net asset value per share Price- to- book

kobo Times Period ended

Total amount

paid/proposed

Dividend paid/proposed

per share

Nmillion Kobo

December 31, 2014

Interim: 11,000 110

Final proposed 1,500 15

December 31, 2013

Interim: 7,000 70

Final: 1,000 10

December 31, 2012

Final: 8,500 60

6.8%

10.6%

10.9%

21.0%

28.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2010 2011 2012 2013 2014

Net assets value per share and price-to-book ratio

Dividend per share and dividend payout ratio Return on equity

Dividend history

* 2012 included special dividend paid on restructuring to holding company

Div

ide

nd

an

d e

arn

ing

s p

er

sh

are

Div

ide

nd

an

d p

ayo

ut ra

tio

NA

V p

er

sh

are

Pric

e-to

-bo

ok

15



Growth in Net interest income amid margin compression

8.3 7.7

13.6

9.7 11.2

2.0 2.2

5.4 4.9

3.9

5.3 4.9

5.0 4.9

5.5

2010 2011 2012 2013 2014

Asset yield Cost of funds Net interest margin

18,981 27,642 33,554 37,013 46,658 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2010 2011 2012 2013 2014

Nmillion

Evolution of net interest income (NII)

Drivers of net interest income Net interest income by business units

Net interest income was up 26% from 2013 supported

by increased interest income from growth in the loan

book and lower cost of funds resulting from high

volume of current account in 1H 2014, while increase

in cost of funds associated with growth in term

deposits in Q4 2014 muted net interest income

growth.

Net interest margin increased to 5.5% in 2014 from

4.9% in 2013. This is a result of increase in interest

income and lower cost of funds despite the increase

in cash reserve requirement.

7,311 12,564

18,374 18,443 21,783 12,566

14,272

13,496 16,622

22,854

570

806

1,684

1,948

2,021

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2010 2011 2012 2013 2014

Wealth Corporate & Investment Banking Personal & Business Banking

Nmillion

%

16



Growth in transaction volumes drives increase in NIR

29,823 27,605 33,856 48,219 57,944 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2014

Non-interest revenue % of total income

Nmillion

17,255 15,009 16,334 24,599 28,538

4,462 3,376 5,154

6,909 8,938

8,106 9,220

12,368

16,712

20,468

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2014

Wealth Personal & Business Banking

Corporate & Investment Banking

Nmillion

Fees & commisio

ns 68%

Trading revenue

30%

Other revenue

2%

Fees & commisio

ns 68%

Trading revenue

31%

Other revenue

1%

Non-interest revenue by business units

Evolution of non-interest revenue (NIR)

Non-interest revenue by type 2014 2013

Non-interest revenue grew by 20%, resulting from

increase in net fee and commission revenue, trading

revenue and other income.

PBB fee and commission revenue grew by 20% on

the back of increase in fees from e-banking

transactions, ATMs and foreign transaction.

CIB fee and commission revenue grew by 16%

benefitting from execution of land mark deals in

investment banking and increased transactional

revenue from transactional products and services.

Trading revenue was up 18% benefitting from an

increase in foreign exchange transactions on behalf

of customers, volatility in foreign exchange market

and increased income on fixed income trading.

17



Increase in impairment charges as interest rates rises

(2,167)

2,381

6,391

1,922

3,502

2,358

968 504 745

(285)

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

(3,000)

(2,000)

(1,000)

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2010 2011 2012 2013 2014

Credit impairment charge on non-performing loans

Credit impairment charge on performing loans

Credit loss ratio

Nmillion %

538 323

2,679

2,344

0

500

1,000

1,500

2,000

2,500

3,000

2014 2013

Corporate & Investment Banking Personal & Business Banking

Nmillion

Credit impairment charges and credit loss ratio

Credit impairment charges by business units

Credit impairment charges by products

Specific

impairment

raised and

(released)

General

impairment

raised and

(released) Recoveries Total

Nmillion Nmillion Nmillion Nmillion

Mortgage lending 192 58 (59) 191

Instalmental sales and

finance leases 316 (115) (4) 196

Cards 28 19 - 46

Corporate lending 1,634 (826) (271) 538

Other loans and

advances 1,931 580 (265) 2,246

Total impairment

charges 4,100 (285) (598) 3,217

change 2014 2013

% Nmillion Nmillion

Specific credit impairment

charges 66 4,100 2,474

Provision for performing loans >(100) (285) 745

Total impairment charges 19 3,815 3,219

Recoveries 8 (598) (552)

Credit impairment charges 21 3,217 2,667

Movement in credit impairment charges

Cre

dit im

pa

irm

en

t ch

arg

es

Cre

dit lo

ss ra

tio

18



Focus on cost: Declining cost-to-income ratio

34,476 41,792 48,789 57,948 61,315

68.6% 75.6% 72.4%

68.0%

58.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010 2011 2012 2013 2014

Operating expenses Cost-to -income ratio

Nmillion

Staff costs

Depreciation

Information technology

Marketing and advertising

Premises and maintenance

AMCON, NDIC and other insurance

Professional fees

Other operating expenses

2014 2013

4,073 3,333 1,255 3,844 8,005

26.1%

33.4%

11.0%

15.6% 20.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2010 2011 2012 2013 2014

Taxation Effective tax rate

Nmillion

Breakdown of operating expenses

Operating expenses and cost-to-income ratio

Taxation and effective tax rate

Operating expenses grew by 6% driven by growth in

staff cost and other expenses.

Staff cost increased by 8% on the back of inflation

adjustment to staff salaries and net movement in

headcount of staff.

Other operating expenses was up by 4% driven by

increase in AMCON sinking fund contribution,

information technology expenses and premises and

maintenance cost. A disciplined approach to spending

resulted in cost savings.

Cost-to-income ratio improved to 58.6% from 68.0%

despite the growth in operating expenses.

19



Growth in profitability and returns

2.7% 1.4% 1.6% 2.9% 3.8% 6.8%

10.6% 10.9%

21.0%

28.7%

2010 2011 2012 2013 2014

ROA ROE

15,374

10,106 11,726

24,617

40,070

10,333 6,643

10,157

20,773

32,065

2010 2011 2012 2013 2014

Profit before tax Profit after tax

Nmillion

20,773

5,145

4,223 1,924

Profit after tax -FY 2013

PBB Profit after taxgrowth

CIB Profit after taxgrowth

Wealth Profit after taxgrowth

Profit after tax -FY 2014

32,065

Nmillion

Profit before tax and Profit after tax Return on equity and Return on assets

Contribution to growth in profit after tax

20

PBB

Obinnia Abajue ED, Stanbic IBTC Bank

21



Significant progress in retail banking

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2010 2011 2012 2013 2014

Numbers

Growth in physical channels

Growth in customer numbers Growth in alternative banking channels

-

50,000

100,000

150,000

200,000

250,000

300,000

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2010 2011 2012 2013 2014

Mobile money users Internet banking users

Numbers Numbers

-

100

200

300

400

500

2010 2011 2012 2013 2014

ATMs Branches Profitable branches

Growth in internet banking users resulting from

investment in a new easy to use internet banking

platform.

Profitable branches continue to increase

facilitated by growth in customer numbers and

transaction volumes and activities.

Service delivery channels were increased during

the year by adding 56 ATMs to take our total

ATMs across the country to 415.

Numbers

22



PBB financial analysis

Performance highlights

Change

% 2014 2013

Income statement Nmillion Nmillion

Net interest income 18 21,783 18,442

Non-interest revenue 29 8,938 6,909

Credit impairment charges 14 (2,679) (2,344)

Operating expenses 2 (30,020) (30,703)

Loss before tax 74 (1,978) (7,696)

Loss after tax 86 (862) (6,007)

Balance sheet

Total assets (10) 257,427 284,810

Gross loans & advances 25 166,391 133,550

Deposit liabilities 7 211,437 197,898

Key ratios 2014 2013

Cost-to-income (%) 97.7 121.1

Net interest margin (%) 8.0 6.5

Credit loss ratio (%) 1.6 1.8

Non-performing loans to total

loans & advances (%) 6.9 7.5

PBB’s performance in 2014 was impressive

contributing N5.1 billion to the growth of group

profit after tax. The business unit loss after tax

improved to N862 million from N6.0 billion loss in

2013.

Net interest income grew by 18% to N21.8 billion

(2013: N18.4 billion) resulting from a 12% growth

in interest income and 1% decline in interest

expense. Interest expense declined as a result of

the increase in current and savings account

deposits in the first nine months of 2014 which

resulted in a lower funding cost. This impacted

positively on net interest margin which increased

to 8.0% from 6.5% in 2013.

Non-interest revenue increased by 29% to N8.9

billion (2013: N6.9 billion) as a result of the growth

in net fees and commission revenue and income

from the disposal of obsolete fixed assets. Net

fees and commission grew on the back of

increase in volume of transactions on e-banking

platforms, ATM transactions and foreign service

transactions for our trade customers.

Cost-to-income ratio improved to 97.7% from

121.1% recorded in 2013. This is due to a 2%

decline in operating expenses resulting from

efficient cost management.

23



PBB achievements and focus

Achievements in 2014 Focus for 2015

Aggressively grow our customer base in our

chosen segments (Commercial, SME and Private

Banking) based on excellent and consistent

customer experience.

Attract and retain engaged, enthusiastic and

committed people

Make clever use of technology to deliver improved

efficiencies, effectiveness and innovation.

Increased the number of customers by over

400,000;

Profitable branches increased to 137 (2013: 103

branches);

Internet banking users increased by over 200%;

Number of ATMs increased by 16% to 415;

24

CIB

Victor Williams ED, Stanbic IBTC Bank

25




Change

% 2014 2013




Credit impairment charges 66 (538) (323)


Profit before tax 33 26,707 20,054

Profit after tax 23 22,617 18,394

Balance sheet

Total assets 45 660,218

455,664

Gross loans & advances 46 247,049

169,756

Deposit liabilities 30 283,498

218,454


Cost-to-income 46.9 50.6

Non-interest revenue to total

income 55.5 59.7

Net interest margin 4.1 3.6

Credit loss ratio 0.2 0.2

Non-performing loans to total loans &

advances 2.6 2.0

CIB financial analysis

CIB increased its profit after tax by 23% in 2014

and contributed 71% of the group’s profit.

Net interest income increased to N22.9 billion,

representing a 37% growth over N16.6 billion

achieved in 2013. The growth is on the back of

19% increase in interest income and interest

expense remained flat at N16.9 billion year-on-

year. This impacted positively on net interest

margin which increased to 4.1% from 3.6% in

2013.

Non-interest revenue grew by 16% to N28.5

billion, resulting from a 12% growth in net fee and

commission revenue and 18% growth in trading

revenue. Net fee and commission growth was

aided by the closure of good advisory mandates

and execution of a landmark deal in our

investment banking business, while trading

income growth was on the back of foreign

exchange earnings from customer transactions.

Poor performance of the capital market impacted

negatively on the revenues of our stock broking

and custody businesses.

Cost-to-income ratio improved to 46.9% from

50.6% recorded in 2013, despite the 16% growth

in operating expenses.

26



CIB achievements and focus


CIB’s strategy centers on clients. Adoption of a

client engagement model across the Standard

Bank Group which focuses on building long-term

relationships, developing more insight into client

needs and affirming commitment to providing

tailor-made solutions;

We continue to focus on enhancing our

capabilities in transactional banking capabilities by

investing in e-banking suite technology;

Harness the resources of the broader Standard

Bank Group to provide our clients seamless

access to pan-African and international capital

markets;

To present integrated offerings to clients in

collaboration with Personal and Business Banking

and Wealth pillars that meet the breadth of their

financial needs;

Continue to be at the forefront of financial

innovation in the market, with a focus on

advancing the efficiency and sophistication of the

Nigerian capital markets.

Joint Global Coordinator, Bookrunner and Joint

Lead Issuing House: Seplat Petroleum: US$500

million (N82.5 billion) IPO on NSE and LSE.;

Maintained dominance of the secondary equity

stock market with a market share in excess of

17% in 2014;

Lead Issuing House: African Development Bank:

N12.95 billion 11.25% Bonds due 2021.;

The Most active Dealing Member Firm (Stanbic

IBTC Stockbrokers) - The Nigerian Stock

Exchange CEO Award 2014 ;

Best Investment Bank in Nigeria - Euromoney

award of excellence (awarded to Stanbic IBTC

Capital);

Best IPO in Africa (Seplat) - EMEA Finance award

2014

27

Wealth

Demola Sogunle CE, Stanbic IBTC Pensions

28



Wealth continues to grow AUM despite decline in capital market

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

2010 2011 2012 2013 2014

Nbillion

-

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

2010 2011 2012 2013 2014

NO (000)

Growth in retirement savings accounts

Growth in assets under management Public vs. Private sector contributions

2014

Public sector 49% Private

sector 51%

2013

Public sector 56%

Private sector 44%

29



Wealth financial analysis


Change

% 2014 2013





Profit before tax 25 15,341 12,259

Profit after tax 23 10,310 8,386

Balance sheet

Total assets 19 26,896 22,572

Assets under management 13 1,490,711 1,316,690

Retirement savings accounts (Nos) 11 1,359,709 1,220,777


Cost to income ratio (%) 31.8 34.3

Wealth continued its impressive performance in

2014 increasing its profit after tax by 23% to

N10.3 billion, which accounts for 32% of the

group’s profit after tax.

Net interest income grew by 4% to N2.0 billion

resulting from good yields in money market

investments.

Non-interest revenue was up 22% to N20.5 billion

(2013: N16.7 billion) due to a continued growth in

assets under management and increase in

pension clients resulting in higher management

fees despite the lull in the capital market

performance. Pension assets grew by 19% to

close at N1.4 trillion from N1.2 trillion recorded in

2013, while non-pension assets under

management declined 26% to N116.9billion (2013:

N159.0 billion), as a result of a State Government

that part-redeemed its savings earmarked for

infrastructure development.

Wealth business continued to maintain a low cost-

to-income ratio as the ratio for 2014 improved to

31.8% from 34.3% recorded in 2013.

30



Wealth achievements and focus


Launching of new products in the trustee

business, Stanbic IBTC Education Trust fund and

the Zarkat Trust;

Introduction of a dollar-denominated collective

investment scheme in line with our strategy to

broaden our bouquet of alternative investment

solutions;

Launching of a pension-index exchange traded

fund;

Exploration of online registration and pension

application as an alternative for the internet savvy

subset of prospective and existing Retirement

Savings Account (RSA) holders.

Achieved record assets under management of

N1.5 trillion (US$7.85 billion) to maintain our

position as the largest institutional investment

business and number one wealth manager in

Nigeria

Deployed successfully the EPCCOS – Electronic

Pension Contribution Collection System for

seamless and convenient remittance of pension

contributions by employers;

Launched an Exchange Traded Fund (Stanbic

IBTC ETF 30), which is expected to track the

movement of the 30 most capitalised equity

securities listed on the floor of the Nigerian Stock

Exchange during the year;

Deployed the single sign-on feature on the

Stanbic IBTC mutual funds online platform. This

feature enables clients access all their mutual

fund accounts using a single set of log-in details;

Recapitalised the trustee business from

shareholders’ fund of N40m to N300m, in line with

the directive from the Securities and Exchange

Commission.

31

Outlook for 2015

Sola David-Borha CE, Stanbic IBTC Holdings

32



Outlook for 2015

The weak external account position will put pressure on the Naira;

Inflation will rise gradually weakening purchasing power as a result of further depreciation of the Naira;

Further tightening of the monetary environment with the implementation of Treasury Single Account by CBN has

reduced further cheap government deposits in the banking industry;

Regulatory induced reduction in transaction charges (COT reduced to N1 per mille, zero COT on e-banking

transactions for businesses) will weigh on banks’ performance and profitability;

Repatriation of investment proceeds by foreign portfolio investors has impacted negatively on stock market

performance and value of listed securities;

Low volume of business transactions in Q1 2015 due to uncertainties around the elections. Volume of business

transactions is expected to increase by second half of 2015 after the new government takes over office; and

The peaceful outcome of the presidential elections is expected to improve investor confidence and improve stock

market performance;

33



Guidance for 2015

We look forward to deliver the following in 2015

•Focus sectors – Agriculture, manufacturing, oil and gas downstream and consumers.

•Loan growth excludes effects of exchange rate depreciation

Loan growth – 10 - 15%

•Improve CASA ratio to 55% (Currently 49%)

Deposit growth – 15 - 18%

•Improve on client engagements

•Enhance collection capabilities

NPL ratio <5%

•Continue to improve credit risk management capabilities

Cost of risk <1.5%

•Focus on higher yield assets, while driving down funding cost

Net interest margin 4.5% - 5%

•Increased use of technology to improve and optimise processes

Cost-to-income ratio < 60%

Return on equity 20% - 23%

34



Q&A

35



Thank you

financial results presentation - donuts financial results presentation for the year ended 31...

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