#1Fidelity Fidelity Bank Investor Presentation Audited Financial Results for the 12 months ended December 31, 2020 www.fidelitybank.ng#2Outline 1. Overview of Fidelity Bank 2. The Operating Environment 3. Financial Highlights 4. Financial Review 5. 2020FY Actual Vs. 2021FY Guidance 2 www.fidelitybank.ng#31. Overview of Fidelity Bank ✓ Fidelity 3 CONGRATS IVY, NO. 1 CHATBOT IN NIGERIA KPMG Digital Channel Scorecard, 2020#4Overview of Fidelity Bank Ownership Total Assets: N2.758bn $6.9bn 32.0bn Authorized Shares Issued And Fully Paid 28.96bn 28.96bn Shares THE Nigerian STOCK EXCHANGE Listings: RC: 2321 Irish Stock Exchange $400m Oct 2022 Eurobond Operations & Contact Channels Governance 14 Board Members Non-Executives: 8 Executives: 6 Professional Staff 2,945 Male: 54% Female: 46% 250 Branches 5.7 Million Accounts 3.0m Mobile Customers 5 Board Committees CARDHOLDER 829 ATMs 2.3m Cards 14,101 POS Agusto&Co. Research, Credit Ratings, Credit Risk Management. GCR ANG (Stable) A-NG (Stable) Foreign Currency Rating: Executive Management Team 8 Fitch Ratings S&P Global B-/Stable/B B-/Stable/B www.fidelitybank.ng#5Overview of Fidelity Bank Retail And Digital Banking Evolution / Progress Report Number of Customer Accounts (#'m) Savings deposits (N'bn) Retail Risk Assets (N'bn) 17% 8% 15% 8% 5.3 5.7 4.5 3.6 3.9 54% 21% 28% 424.4 15% 57.2 -22% -16% 275.2 228.0 44.8 155.0 178.6 37.6 43% 53.8 -1% 53.4 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Mobile/Internet Banking Cust. (#'000) Number of Debit Cardholders (#'000) Electronic Banking Penetration (%) 38% 31% 21% 2% 11% 6% 14% 3,000 2,488 2,206 2,338 69% 1,937 1,982 1,906 1,005 1,701 795 13%* 1,382 513 820 345 * 5%* 7%* 5%* 52.8% 47.4% 42.4% 35.4% 22.8% 184 1,693 1,995 636 1,036 1,393 2016 2017 2018 2019 2020 2016 2017 2018 ■Mobile Banking 2019 2020 ■Internet Banking 2016 2017 2018 2019 2020 5 * Approximated difference between 2 values www.fidelitybank.ng#6Transaction Volume Statistics Internet Banking (#' Mn) Mobile Banking (# 'Mn) 2020FY 2019FY 15.2 POS (#' Mn) 27.0 2020FY 26.3 2019FY 18.2 78.3% 44.2% 2020FY 2019FY 46.0 ATM (#' Mn) 2020FY 44.6 63.2 2019FY 58.4 9 NIP (# 'Mn) 37.5% 24.7 -23.5% 2019FY 56.9% 38.8 2020FY In-Branch (# 'Mn) 31.2 -34.1% 20.6 2019FY 2020FY www.fidelitybank.ng#73. Operating Environment Sore Throat Sneezing Corona Virus Symptoms Coughing Fever Headache If you have any of these symptoms, please do well to isolate yourself. Contact Nigerian Center for Disease Control on 0800 970000 (Toll-Free) For more information contact: Human Resources f You O tube in ☑ Fidelity#8The Operating Environment The Nigerian economy exited recession in Q4 '20 as growth in Telecoms and Agriculture sectors etc. offset the impact of lower oil prices. GDP growth in Q4 '20 was 0.11% from -3.6% in Q3 '20. However, the full-year 2020 GDP growth came in at -1.92% compared to 2.3% in 2019. Headline inflation inched up for the 16th consecutive month from 11.0% in Aug 2019 to 15.8% in Dec 2020. High food prices, insecurity, upward review of PMS price, and pass-through effect of the pandemic etc. led to rising inflation rate. Average crude oil prices (Bonny Light) in 2020FY dropped by 35.7% to $42.09pb from $65.49pb with the highest and lowest prices at $72.18pb in Jul and $7.15 in Apr 2020 respectively. Crude prices have since stabilized above $60pb while the external reserves is now at $34.8bn. Real GDP Growth 2.6% Q1 '19 1.9% 0.1% Q2 '20 Q4'20 -3.6% -6.1% Headline Inflation (%) 15.8 12.2 12.3 12.6 13.2 14.2 * 12.0 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Bonny Light ($ per Barrel) 67.9 53.8 42.5 45.3 13.9 36.4 51.3 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 8 www.fidelitybank.ng#9Key Regulatory & Policy Changes ■ MPC retained policy rate at 13.5% but increased CRR by 500bpts to 27.5%. " CBN kept the LDR unchanged at 65.0% for Deposit Money Banks (DMBs). CBN approved regulatory forbearance for assets funded with its intervention funds. Bankers Committee agreed donation modalities for Covid-19. Tier | = N500m | Tier II = N250m | Others = N100m ■ MPR reviewed downward to 11.5% from 12.5%, while the asymmetric corridor was lowered from +200/-500bps to +100/-700bps. ■ Other policy rates retained. ■ CBN drops the minimum benchmark for interest rate on savings accounts to 10.0% of MPR from 30% of MPR. ■ PMS pump price increased to N151.56 per litre from N145 effective 2nd Sep 2020 Q1 Q2 MPR reduced by 100bpts to 12.5% while other policy rates remained unchanged. ■ Interest rate on savings deposits dropped to 3.75% from 4.05% due to reduction in MPR. CBN resumed FX sale to SMEs and for invisibles including payment of tuition fee. FG approves the suspension of interest payment on state government debts. Q3 Q4 ■ The Nigerian Electricity Regulatory Commission (NERC) approved service reflected tariffs in the Power Sector effective 12th Oct 2020. ■ CBN approved the option of receiving diaspora remittances in NGN or USD FG reopens 4 land boarders (Seme | Maigatari | llela | Mfun) ■ The Senate passed the N13.6bn appropriation bill. www.fidelitybank.ng#10Covid-19 Pandemic: Our Response Two Committees headed by Executive Directors were setup to focus on the impact of the pandemic on our Business Strategy and Business Continuity Business Strategy Conducted early assessment of the pandemic based on 3 scenarios: ➤ Base Case: the pandemic is contained within 3M and the economy reopens in July Moderate Case: the pandemic is contained in 6M and the economy reopens in Oct. Worst Case: the pandemic remains above 6M but the economy reopens in 2021. ✰ Stress test revealed a 15% - 30% negative impact on PBT from the Base Case to the Worst Case Scenario. Granted moratorium and reviewed lending rate downward for specific sector/customers. ✰ Obtained varying palliatives from DFIs on on- lending facilities granted to customers. 10 Business Continuity ✰ Introduced new Covid-19 protocol that limited both staff and customers' footprint at our business locations. Implemented new health and safety measures for staff and customers. Commenced remote working with at least 50% of staff working from home. Prior investment in technology enabled seamless remote working & collaboration. Migrated additional services to the cloud in line with the remote working protocol. Activated new IT Security protocols in view of the changing cyber-risk landscape. www.fidelitybank.ng#112. Financial Highlights Fidelity Dial *770# To Pay Bills *770# 11 www.fidelitybank.ng#12Financial Highlights ☐ Net interest margin (NIM) improved to 6.3% from 6.2% in 2019FY on account of a 270bpts drop in average funding cost to 3.6% from 6.3% in 2019FY. This translated to a 28.6% drop in total interest expenses despite a 31.3% increase in interest bearing liabilities. NIM stood above our 2020FY guidance of 5.5% - 6.0%. ☐ Net fee income declined by 14.9% YoY but increased by 14.0% QoQ driven by double-digit growth in digital banking income, FX related income, account maintenance charges and trade income etc. The downward review of transaction charges in line with the new bankers' tariff impacted negatively on fees and commission income, however, increased transaction volume post lockdown across states spurred fee income in Q4 2020. ☐ Total operating expenses inched up by 2.0% to N83.6bn largely due to N2.2bn growth in regulatory charges. However, growth in operating expenses remains below headline inflation with cost-to-income ratio dropping to 65.1% from 73.4% in 2019FY and below of our 2020 Guidance of 70.0%. □ Operating profit (i.e. PBT before impairment) increased 50.9% to N44.9bn from N29.8bn in 2019FY. However, PBT declined by 7.6% to N28.1bn from N30.4bn as we proactively increased our provisions on risk assets to N16.9bn from a net write-back of NO.6bn in 2019FY. 12 www.fidelitybank.ng#13Financial Highlights ☐ Total deposits increased by 38.7% to №1,699.0bn from №1,225.2bn in 2019FY as we recorded strong growth across all deposit products. LCY deposits came in at N1,400.1bn representing 82.5% of total deposits while FCY deposits increased by 3.3% to N298.2bn and now accounts for 17.5% of total deposits. ☐ Savings deposits increased by 54.2% to N424.4bn from N275.2bn in 2019FY and now accounts for 25.0% of total deposits from 22.5% in 2019FY. Savings was responsible for 32.1% growth in total deposits. ☐ Net loan book increased by 17.7% to N1,326.1bn from N1,127.0bn in 2019FY. However, actual growth in net loan book was 13.3% while the impact of naira devaluation resulted in 4.4% growth in loans. ☐ We converted our FCY book at FX rate of N400.3 per USD compared to N364.7 per USD in 2019FY. ☐ Non-Performing Loans (NPL) ratio is now 3.8% from 3.3% in 2019FY while cost of risk came in at 1.4% as we increased our loan provision buffers against possible headwinds. Regulatory Ratios stood above the required thresholds with liquidity ratio at 37.8% and capital adequacy ratio (IFRS 9 - Full Impact) at 18.2%. Our CAR does not include the newly priced 10yrs N41.2bn Tier II Local Bonds due 2031 at 8.5% p.a. 13 www.fidelitybank.ng#14Financial Highlights Summary of Income Statement: YoY Change N'million 2019FY 2020FY VAR % VAR Gross Earnings 218,011 206,204 (11,807) -5.4% Interest Income Loans 139,204 130,476 (8,728) -6.3% Interest Income Liquid Assets 45,637 46,277 640 1.4% Total Interest Income 184,841 176,753 (8,088) -4.4% Interest Expense Customer Deposits (73,634) (45,223) (28,411) -38.6% Interest Expense Borrowings (28,152) (27,407) (745) -2.6% Total Interest Expense (101,786) (72,630) (29,156) -28.6% Net Interest Income 83,055 104,123 21,068 25.4% FX Income 6,542 9,976 3,434 52.5% Digital Income 8,917 7,242 (1,675) -18.8% Other Fee Income (Net) 13,245 7,204 (6,041) -45.6% Net Fee Income 28,703 24,422 (4,281) -14.9% Net Revenue 111,758 128,545 16,787 15.0% Total Expenses (81,992) (83,633) 1,641 2.0% Operating Profit 29,766 44,912 15,146 50.9% Net Impairment Losses 587 (16,858) 17,445 2,971.9% Profit Before Tax 30,353 28,054 (2,299) -7.6% Please note: Gross earnings was calculated based on total fees & commission income Net fee income includes net gains/(losses) from financial instruments 14 www.fidelitybank.ng#15Financial Highlights Summary of Income Statement: QoQ Change N'million Q1 2020 Q2 2020 Q3 2020 Q4 2020 VAR % VAR Gross Earnings 51,159 54,596 49,275 51,174 1,898 3.9% Interest Income Loans 32,340 31,373 33,208 33,555 347 1.0% Interest Income Liquid Assets 11,586 12,323 11,639 10,729 (910) -7.8% Total Interest Income 43,926 43,696 44,847 44,284 (563) -1.3% Interest Expense Customer Deposits (12,673) (13,595) (11,130) (7,825) (3,305) -29.7% Interest Expense Borrowings (6,653) (6,381) (7,037) (7,336) 299 Total Interest Expense (19,326) (19,976) (18,167) (15,161) (3,006) 4.2% -16.5% Net Interest Income 24,600 23,720 26,680 29,123 2,444 9.2% FX Income 1,965 6,354 (362) 2,019 2,381 657.8% E-banking Income 1,624 1,546 1,855 2,217 363 19.6% Other Fee Income (Net) 2,126 4,710 1,356 (988) (2,345) -172.9% Net Fee Income 5,715 12,610 2,849 3,248 399 14.0% Net Revenue 30,315 36,330 29,529 32,371 2,842 9.6% Total Expenses (21,628) (25,213) (16,949) (19,843) 2,894 17.1% Operating Profit 8,687 11,117 12,580 12,528 (52) -0.4% Net Impairment Losses (2,103) (5,738) (3,194) (5,823) 2,628 82.3% Profit Before Tax 6,583 5,380 9,385 6,706 (2,680) -28.6% Please note: Gross earnings was calculated based on total fees & commission income Net fee income includes net gains/(losses) from financial instruments 15 www.fidelitybank.ng#16Financial Highlights Statement of Financial Position: YTD Change N'million 2019FY 2020FY VAR % VAR Total Assets Earning Assets 2,114,037 2,758,148 644,111 30.5% 1,474,252 1,828,807 354,555 24.0% Bank Placements 55,812 51,799 (4,013) -7.2% Treasury Bills Bonds Customer Loans (Naira) 183,363 264,032 80,669 44.0% 108,103 186,870 78,767 72.9% 662,214 769,401 107,187 16.2% Customer Loans (FCY) 464,760 556,705 91,945 19.8% Non-Earning Assets 639,785 929,341 289,556 45.3% Cash 31,658 44,751 13,093 41.4% Cash Reserve 304,618 432,741 128,123 42.1% Bal. with other Banks/Settlement Acct 218,660 339,331 120,671 55.2% Fixed Assets 38,392 38,446 54 0.1% All Other Assets 46,457 74,072 27,615 59.4% Interest Bearing Liabilities 1,726,938 2,268,094 541,156 31.3% Demand 691,610 883,300 191,690 27.7% Savings Time Deposits Other Borrowings 275,219 424,384 149,165 54.2% 258,384 391,342 132,958 51.5% 76,308 99,055 22,747 29.8% On-lending Facilities 250,139 308,097 57,958 23.2% Debt Securities 175,278 161,916 (13,362) -7.6% All Other Liabilities 153,069 216,521 63,452 41.5% Equity 234,030 273,533 39,503 16.9% Please note: The Balance Sheet was converted at an exchange rate of #400.33/USD 16 www.fidelitybank.ng#17Financial Highlights Statement of Financial Position: QoQ Change Total Assets N'million Earning Assets Q1 2020 H1 2020 9M 2020 2020FY VAR % VAR 2,246,788 2,403,234 2,575,198 2,758,148 182,950 7.1% 1,522,752 1,578,092 1,703,347 1,828,807 125,460 7.4% Bank Placements 57,133 70,443 53,615 51,799 (1,816) -3.4% Treasury Bills 210,342 206,816 211,073 264,032 52,959 25.1% Bonds 89,450 91,731 166,138 186,870 20,732 12.5% Customer Loans (Naira) 664,643 656,165 715,219 769,401 54,182 7.6% Customer Loans (FCY) 501,183 552,937 557,301 556,705 (596) -0.1% Non-Earning Assets 724,036 825,142 871,851 929,341 57,490 6.6% Cash 35,735 30,430 28,929 44,751 15,822 54.7% Cash Reserve 408,889 487,861 484,340 432,741 (51,599) -10.7% Bal. with other Banks/Settlement 197,141 217,362 251,254 339,331 88,077 35.1% Fixed Assets 38,430 38,275 38,738 38,446 (292) -0.8% All Other Assets 43,841 51,214 68,591 74,072 5,481 8.0% Interest Bearing Liabilities 1,846,297 1,923,814 2,070,115 2,268,094 197,979 9.6% Demand 734,787 706,356 763,743 883,300 119,557 15.7% Savings 312,109 363,920 385,080 424,384 39,304 10.2% Time Deposits 305,366 335,669 349,596 391,342 41,746 11.9% Other Borrowings 50,478 75,788 73,295 99,055 25,760 35.1% On-lending Facilities 252,174 255,996 306,810 308,097 1,287 0.4% Debt Securities 191,383 186,085 191,590 161,916 (29.674) -15.5% All Other Liabilities 158,106 228,731 242,909 216,521 (26,388) -10.9% Equity 242,384 250,689 262,174 273,533 11,359 4.3% 17 www.fidelitybank.ng#18Gross Earnings Analysis N'million 2019FY 2020FY VAR % VAR Total Earnings: 2019FY Total Earnings: 2020FY Total Earnings 218,011 206,204 (11,807) -5.4% Maint. Fee, 2% Interest Income Loans 139,204 130,476 (8,728) -6.3% Digital, 4% Trade, 1% Others, 6% Maint. Fee, 1% Trade, 1% Digital, 4% Others, 4% Int. Inc. Liquid Assets 45,637 46,277 640 1.4% FX Income 6,542 9,976 3,434 52.5% FX Income 3% FX Income, 5% Digital Income 8,917 7,242 (1,675) -18.8% A/C Maintenance fee 3,295 2,800 (495) -15.0% Trade Income 2,360 1,610 Other Income 12,057 7,823 (750) (4,234) -31.8% -35.1% Int. Inc. Liquid Assets, 21% Int. Income Loans, 64% Int. Inc. Liquid Assets, 22% Int. Income Loans, 63% N'million Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total Earnings: Q3 2020 Total Earnings: Q4 2020 Total Earnings 51,159 54,596 49,275 51,174 Maint. Fee, 1% Trade, 1% Maint. Fee, 2% Trade, 1% Interest Income Loans 32,340 31,373 33,208 33,555 Digital, 4%. Others, 4% Digital, 4% Others, 3% Int. Inc. Liquid Assets 11,586 12,323 11,639 10,729 FX Income, FX Income 1,965 6,354 (362) 2,019 -1% FX Income, 4% Digital Income 1,624 1,546 1,855 2,217 A/C Maintenance fee 735 513 731 821 Trade Income 543 240 356 471 Other Income 2,366 2,247 1,849 1,361 Int. Income Loans, 66% Gross earnings dropped by 5.4% YoY (increased 3.9% QoQ) due to the pass-through effect of Covid-19 pandemic on the economy. Improved business activities post lockdown led to increased revenue in Q4: customer induced transactions across all service channels increased by 7.2% QoQ in Q4 2020. Int. Inc. Liquid Assets, 24% Int. Income Loans, 67% Int. Inc. Liquid Assets, 21% 18 www.fidelitybank.ng#19Net Interest Margin Analysis NIM improved to 6.3% from 6.2% in 2019FY, largely due to 270bps drop in average funding cost despite a drop in yields on earnings assets. The decline in average funding cost was due to a combination of lower interest rate environment and increased CASA to 60.1% from 57.6% in 2019FY. ► Avg. cost of deposits dropped by 359bpts to 3.1% while the avg. borrowing cost declined by 37bpts to 5.1%. Moderation in yields on earning assets was largely caused by a lower average lending rate which stood at 10.6%. Yield on Earning Assets NIM Trend 6.6% 6.2% 6.4% 6.3% 6.3% 2019FY Q1 2020 H1 2020 9M 2020 2020FY 13.6% 6.3% 11.8% 11.5% 11.1% 10.7% 2019FY Q1 2020 H1 2020 9M 2020 2020FY 19 Funding Cost 4.4% 4.3% 4.0% 3.6% 2019FY Q1 2020 H1 2020 9M 2020 2020FY www.fidelitybank.ng#20Total Expense Analysis N'million 2019FY 2020FY VAR % VAR Total Expenses: 2019FY Total Expenses 81,992 83,633 1,641 2.0% Others Exp., 40% Staff Cost, 29% Others Exp., 36% Total Expenses: 2020FY Staff Cost, 30% Staff Cost 24,129 25,367 1,238 5.1% Depreciation 5,421 6,207 786 14.5% NDIC/AMCON Cost 15,210 17,399 2,189 14.4% Technology Cost 3,301 3,477 176 5.3% Energy, 2% Energy, 1% Energy Cost 1,462 1,225 (237) -16.2% Security 1,149 1,378 229 19.9% Technology Branding & Advert 10,430 9,594 (836) -8.0% Cost, 4% Depreciation, 7% Other Expenses 20,890 18,986 (1,904) -9.1% Regulatory, 19% Technology Cost, 4% Depreciation, 7% Regulatory, 21% N'million Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total Expenses: Q3 2020 Total Expenses: Q4 2020 Total Expenses 21,628 25,213 16,949 19,843 Others Exp., 38% Staff Cost, 38% Others Exp., 45% Staff Cost, 34% Staff Cost 6,398 5,792 6,430 6,747 Depreciation 1,415 1,615 1,543 1,634 NDIC/AMCON Cost 4,285 10,330 1,347 1,437 Technology Cost 920 835 879 843 Energy, 2% Energy Cost 330 282 282 331 Energy, 2% Security 335 331 338 374 Branding & Advert 2,659 1,986 2,180 2,769 Technology Cost, 5% Depreciation, 9% Technology Cost, 4% Depreciation, 8% Other Expenses 5,286 4,042 3,950 5,708 Regulatory, 8% www.fidelitybank.ng Regulatory, 7% Total operating expenses inched up by 2.0% (N1.6bn) in N83.6bn, largely due to N2.2bn growth in regulatory charges (AMCON & NDIC). Over 50.0% of our cost lines declined in 2020FY as we harnessed the benefits of remote working which contributed to the drop in our cost- to-income ratio to 65.1% 20 20#214. Financial Review - SFP Please do not miss it! FIDELITY WEEKLY BY FIDELITY BANK A Weekly Dose of Entertainment 21 DELITY WEEKLY f in U @fidelitybankplc#22Funding Base Analysis N'million 2019FY 2020FY VAR % VAR Funding Structure: 2019FY Demand Deposits 691,610 883,300 191,690 27.7% Debt, 9% Funding Structure: 2020FY Equity, 12% Debt, 6% Equity, 11% Savings Deposits Tenor Deposits 275,219 424,384 258,384 391,342 149,165 54.2% 132,958 51.5% Other Borrowings On-Lending Demand, 35% 76,308 250,139 308,097 99,055 22,747 29.8% Demand, 35% On-lending, 13% 57,958 23.2% On-lending, 12% Debt Securities 175,278 161,916 (13,362) -7.6% Savings, 14% Savings, 17% Equity Total 234,030 273,533 1,960,968 2,541,627 39,503 16.9% 580,659 29.6% Other Borrowings, 4% Time, 13% Other Borrowings, 4% Time, 15% N'million Q1 2020 H1 2020 9M 2020 2020FY Funding Structure: Q3 2020 Funding Structure: Q4 2020 Demand Deposits 734,787 706,356 Savings Deposits 312,109 363,920 Tenor Deposits 305,366 Other Borrowings On-Lending 50,478 252,174 Debt Securities Equity Total 335,669 75,788 255,996 191,383 186,085 191,590 242,384 250,689 262,174 273,533 2,088,682 2,174,503 2,332,289 2,541,627 763,743 883,300 385,080 424,384 349,596 391,342 73,295 99,055 On-lending, 13% 306,810 308,097 161,916 Debt, 8% Equity, 11% Debt, 6% Equity, 11% Demand, 33% Demand, 35% On-lending, 12% Savings, 17% Savings, 17% Other Borrowings, 3% Time, 15% Other Borrowings, 4% Time, 15% www.fidelitybank.ng Total funding base was boosted by 38.7% growth in total deposits: Total deposits now represents 66.8% of total funding base (2019FY: 62.5%) and 74.9% of interest-bearing liabilities (2019FY: 70.9%). Drop in debt securities in Q4 was due to the repayment of N30bn Tier II Bonds in mid - Nov 2020. 22 22#23Deposits Analysis ► Total customer deposits increased by 38.7% to 1,699.0bn from #1,225.2bn in 2019FY. ▸ While actual growth was 36.5%, the impact of FX rate adjustment accounted for only 2.2% growth in deposits. ➤ Low-cost deposits grew by 35.3% to N1,307.7bn and was responsible for 71.9% of the absolute growth in total deposits. ▸ FCY deposits increased by 3.3% and now accounts for 17.5% of total deposits. ▸ Total FCY deposit declined to $745m from $791m in 2019FY as customers utilize more of their funds for trade purpose. Deposits by Products - 2019FY Vs. 2020 FY N'billion 883.3 691.6 424.4 391.3 275.2 258.4 Total Deposits N'billion 23.6% 23.7% 21.4% 21.2% 17.5% 1,699.0 1,498.4 1,352.3 1,225.2 288.6 1,405.9 300.8 298.2 317.8 320.8 1,400.8 936.6 1,031.4 1,105.2 1,180.6 2019FY Q1 2020 ■LCY Deposits H1 2020 ■FCY Deposits 9M 2020 2020FY ■% FCY Deposits 1,699.0 Time Deposit 23.0% 1,225.2 Deposits by Products - 2020FY Savings Deposit Demand Savings Time | Total Deposits 25.0% ■2019FY 2020FY 23 23 Demand Deposit 52.0% www.fidelitybank.ng#24Retail Banking Analysis (Personal Banking) ► Savings deposits grew by 54.2% and now represent 25.0% of total deposits from 22.5% in 2019FY. Savings Deposits Trend N'billion 22.5% 23.1% 25.9% 25.7% 25.0% ▸ Savings deposits accounted for 32.1% of the growth in local currency deposits in 2020FY. ► Retail assets is gradually ticking up as economic activities improve across sectors. 424.4 385.1 363.9 312.1 275.2 ▸ Expansion in our retail banking businesses is anchored on increased digital banking penetration currently at 52.8% and collaborations with Fintechs. 2019FY Q1 2020 H1 2020 9M 2020 2020FY Savings Deposits 1% Share of Total Deposits Retail Low Cost Deposits Retail Assets Trend N'billion N'billion 37.0% 37.7% 41.8% 40.7% 38.8% 4.6% 4.1% 4.0% 4.0% 3.8% 507.3 53.8 53.0 53.4 468.0 50.4 51.2 446.9 358.2 395.1 www.fidelitybank.ng 2019FY Q1 2020 H1 2020 9M 2020 2020FY 2019FY Q1 2020 H1 2020 9M 2020 2020FY ■Retail Deposits ■% Share of Low Cost Deposits ■Retail Assets ■% Share of Total Loan Book 24 24#25Liquid Assets Position Short-term Funds 29.6% As a % of Total Assets Liquidity Ratio Placements Treasury Bills Bonds 1.9% 9.6% As a % of Total Assets As a % of Total Assets 6.8% As a % of Total Assets Gross Loans to Funding Ratio 37.8% 68.2% 66.0% 65.9% 35.0% 35.0% 64.5% 61.4% 31.6% 32.1% 30.0% 30.0% 30.0% 30.0% 30.0% 2019FY Q1 2020 H1 2020 9M 2020 2020FY Fidelity LR Regulatory Minimum 2019FY Q1 2020 H1 2020 9M 2020 2020FY Liquidity Ratio has been sustained above the regulatory minimum at 37.8% with 62.0% of eligible liquid assets invested in T-bills and FGN bonds from 60.0% in 2019FY. LDR was 61.4% from 68.2% in 2019FY but stood at 65.1% after weighting all permissible loans: Mortgage | SME | Consumer loans. 25 www.fidelitybank.ng#26Loan Portfolio Analysis Breakdown of Loans & Advances to Customers: 2019FY Vs. 2020FY N'million Communication 2019FY 32,416 2020FY VAR % VAR 32,217 (199) -0.6% Oil and Gas 244,799 315,155 70,356 28.7% Upstream Downstream Services 132,860 157,939 25,079 18.9% 52,203 71,448 19,245 36.9% 59,735 85,767 26,032 43.6% Power 118,413 134,984 16,571 14.0% Manufacturing 215,707 241,835 26,128 12.1% General Commerce 98,976 124,925 25,949 26.2% Transport 135,991 159,080 23,089 17.0% Consumer (Individuals) 53,786 53,422 (364) -0.7% Government 150,086 157,449 7,363 4.9% Construction 35,594 44,544 8,950 25.1% Agriculture 32,931 46,167 13,236 40.2% Real Estate 26,495 28,110 1,615 6.1% Education 5,159 8,404 3,245 62.9% Finance and Insurance 4,508 3,668 (840) -18.6% Others 23,529 43,665 20,136 85.6% Total 1,178,389 1,393,624 215,236 18.3% 26 www.fidelitybank.ng#27Loan Portfolio Analysis Breakdown of Loans & Advances to Customers N'million Q1 2020 H1 2020 9M 2020 2020FY Construction,_ 3.2% Communication Oil and Gas 30,121 281,720 309,576 324,884 31,521 30,548 32,217 Oil & Gas: 315,155 Service, 6.2% Upstream 139,742 145,864 152,278 157,939 Government, 11.3% - Downstream 68,551 88,587 92,736 71,448 Consumer, 3.8% - Services 73,426 75,126 79,870 85,767 Power 127,068 127,925 131,139 134,984 Oil & Gas: Downstream, 5.1% Manufacturing 210,770 209,632 224,732 241,835 Transport, 11.4% Loan Analysis - 2020FY Agriculture, 3.3% Others, 6.0% Communication, 2.3% Oil & Gas: Upstream, 11.3% Power, 9.7% Manufacturing, 17.4% Gen. Commerce, 9.0% Gen. Commerce 100,915 115,244 117,321 124,925 Transport 142,072 144,476 145,436 159,080 Loan Analysis - 2019FY Consumer 50,375 51,197 52,961 53,422 Construction,. Government 137,674 137,442 159,026 157,449 3.0% Agriculture, 2.8% Others, 5.1% Construction 36,736 37,000 40,290 44,544 Oil & Gas: Agriculture 35,954 37,896 39,719 46,167 Service, 5.1% Real Estate 27,076 26,508 26,747 28,110 Government, 12.7% Education 5,029 5,644 5,752 8,404 Consumer, 4.6% Fin. & Insurance 1,471 1,743 1,123 3,668 Others 31,918 31,483 34,969 43,665 Total 1,218,897 1,267,289 1,334,648 1,393,624 Oil & Gas: Downstream, 4.4% Gen. Commerce, 8.4% Communication, 2.8% Oil & Gas: Upstream, 11.3% Power, 10.0% Manufacturing, 18.3% Transport, 11.5% 27 www.fidelitybank.ng#28Loan Book Analysis ▸ Net loans & advances increased by 17.7% to 1,326.1bn, with 85.9% of the loan book in term loans. Net Loans and Advances to Customers N'billion ▸ Actual real loan growth was 13.3% while the adjustment in exchange rate from N364.7/$ to N400.3/$ accounted for 4.4% (N49.5bn). 1,326.1 1,127.0 1,165.8 1,209.1 1,272.5 49.5 30.5 28.3 31.5 526.8 507.2 464.8 472.9 521.4 ▸ FCY loans now constitute about 42.0% of the net loan book from 41.2% in 2019FY. 662.2 664.6 656.2 715.2 769.4 ► About 29.1% (N58.0bn) of the growth in the loan book were created with on-lending and intervention facilities. Net Loans & Advances: LCY Vs. FCY 41.2% 43.0% 45.7% 43.8% 42.0% 58.8% 57.0% 54.3% 56.2% 58.0% 2019FY Q1 2020 H1 2020 9M 2020 2020FY ■LCY Loans FCY Loans 28 2019FY Q1 2020 H1 2020 9M 2020 2020FY ■LCY Loans ■FCY Loans ■Devaluation Impact Total Loans by Type - 2020FY Lease Finances, 2.5% Term Loans, 85.9% Overdrafts, 11.6% www.fidelitybank.ng#29Impairment Analysis 2020FY Impairment Charge Impairment Charge: 2019FY Vs. 2020FY (13,029) 352 (16,858) (16,858) (2,059) (2,122) Stage 1 Stage 2 Stage 3 Other Assets Other Losses Total 2019FY Impairment Charge 2020FY 2019FY 587 Total Impairment 2,972% 2019FY 2020FY VAR % VAR (2,686) (4,705) FCY 8,637 16,716 8,078 93.5% (292) 587 NGN 42,778 50,803 8,024 18.8% 2,276 5,994 Stage 1 Stage 2 Stage 3 Other Assets Other Losses Total TOTAL 51,416 67,518 16,103 31.3% Other Losses represent net Losses on de-recognition of financial assets measured at amortised cost. 29 29 www.fidelitybank.ng#30Loan Book Breakdown - Stage 1|2|3 Breakdown of Loans & Advances to Customers N'million Communication Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total 18,284 12,000 1,932 32,217 56.8% 37.2% 6.0% 2.3% Oil and Gas 235,270 75,416 4,469 315,155 74.7% 23.9% 1.4% 22.6% Upstream 87,514 70,426 0 157,939 55.4% 44.6% 0.0% 11.3% Downstream 63,136 4,754 3,559 71,448 88.4% 6.7% 5.0% 5.1% Services 84,620 236 911 85,767 98.7% 0.3% 1.1% 6.2% Power 3,534 131,450 0 134,984 2.6% 97.4% 0.0% 9.7% Manufacturing 222,707 15,838 3,290 241,835 92.1% 6.5% 1.4% 17.4% General Commerce 117,879 825 6,221 124,925 94.4% 0.7% 5.0% 9.0% Transport 118,190 24,328 16,562 159,080 74.3% 15.3% 10.4% 11.4% Consumer 49,492 294 3,636 53,422 92.6% 0.6% 6.8% 3.8% Government Construction 157,007 413 30 157,449 99.7% 0.3% 0.0% 11.3% 43,747 0 797 44,544 98.2% 0.0% 1.8% 3.2% Agriculture 40,265 2,025 3,877 46,167 87.2% 4.4% 8.4% 3.3% Real Estate 28,030 43 36 28,110 99.7% 0.2% 0.1% 2.0% Education 7,820 17 566 8,404 93.1% 0.2% 6.7% 0.6% Finance & Insurance 3,069 0 598 3,668 83.7% 0.0% 16.3% 0.3% Others 31,941 689 11,035 43,665 73.2% 1.6% 25.3% 3.1% Total 1,077,234 263,340 53,050 1,393,624 77.3% 18.9% 3.8% 100.0% % Share of Total 77.3% 18.9% 3.8% 100.0% Coverage Ratio 0.9% 8.1% 68.9% 4.8% 30 30 www.fidelitybank.ng#31Loan Book Breakdown - Stage 1|2|3 YoY Change In Loan Book Stages: 2019FY Vs. 2020FY N'million Communication Oil and Gas Stage 1 (1,294) Stage 2 Stage 3 Total 361 734 (199) 103,721 (22,498) (10,867) 70,356 Upstream Downstream Services 14,118 11,136 (175) 25,079 36,480 (7,171) (10,065) 19,245 53,122 (26,463) (627) 26,032 Power (23,417) 39,988 0 16,571 Manufacturing 34,777 (8,919) 270 26,128 General Commerce 26,542 (4,424) 3,830 25,949 Transport 13,786 (286) 9,589 23,089 Consumer (Individuals) (1,607) 270 973 (364) Government 6,921 413 30 7,363 Construction 11,240 0 (2,290) 8,950 Agriculture 9,982 2,024 1,230 13,236 Real Estate 1,536 43 36 1,615 Education 3,098 16 131 3,245 Finance and Insurance (1,365) (65) 590 (840) Others 10,158 (182) 10,161 20,137 Total 194,078 6,741 14,417 215,236 31 www.fidelitybank.ng#32NPL Analysis ➤ NPL ratio (Stage 3 Loans) increased to 3.8% from 3.3% in 2019FY due to 37.3% increase in absolute NPL book to N53.1bn. N'billion ► YoY NPL growth is partly due to our conservative stress test on sectors susceptible to the global pandemic and economic lockdown. ► QoQ drop in NPL figure was due to improving business environment post lockdown. ▸ Coverage remains high at 139.3% with specific provisions on Stage 3 Loans currently at 68.9% Vs. 60.9% in 2019FY. NPL Coverage Ratio N' billion % Ratio Gross Loans and Advances 1,393.6 1,178.4 38.6 1,218.9 58.1 1,267.3 61.3 1,334.6 53.1 63.1 1,139.8 1,160.8 1,206.0 1,271.6 1,340.6 2019FY Q1 2020 H1 2020 9M 2020 ■Performing Loans 2020FY ■Non-performing Loans Non-performing Loans 169.1% 63.1 58.1 61.3 4.8% 4.8% 4.7% 53.1 3.3% 38.6 139.3% 115.2% 117.5% 115.8% 3.8% 2019FY Q1 2020 H1 2020 9M 2020 2020FY 2019FY Q1 2020 H1 2020 9M 2020 2020FY Non-performing Loans Coverage Ratio 32 32 www.fidelitybank.ng#33NPL Portfolio Analysis Breakdown of Non-performing Loans: 2019FY Vs. 2020FY 2019FY 2020FY VAR % VAR N'million N'million N'million % 2019FY NPL Ratio 2020FY NPL Ratio Communication Oil and gas 1,198 1,932 734 61.3% 3.7% 6.0% 15,336 4,469 (10,867) -70.9% 6.3% 1.4% - Oil & Gas Upstream 175 (175) -100.0% 0.1% 0.0% - Oil & Gas Downstream 13,624 3,559 (10,065) -73.9% 26.1% 5.0% - Oil & Gas Services 1,538 911 (627) -40.8% 2.6% 1.1% Power 0 0 0.0 0.0% 0.0% Manufacturing 3,020 3,290 270 8.9% 1.4% 1.4% General Commerce 2,391 6,221 3,830 160.2% 2.4% 5.0% Transport 6,973 16,562 9,589 137.5% 5.1% 10.4% Consumer (Individuals) 2,663 3,636 973 36.6% 5.0% 6.8% Government 0 30 30 100.0% 0.0% 0.0% Construction 3,087 797 (2,290) -74.2% 8.7% 1.8% Agriculture 2,647 3,877 1,230 46.5% 8.0% 8.4% Real Estate 0 36 36 100.0% 0.0% 0.1% Education 435 566 131 30.2% 8.4% 6.7% Finance and Insurance 9 598 590 6,850.6% 0.2% 16.3% Others 874 11,035 10,161 1,162.6% 3.7% 25.3% Total 38,633 53,050 14,417 37.3% 3.3% 3.8% 33 www.fidelitybank.ng#34NPL Portfolio Analysis Breakdown of Non-performing Loans N'million Q1 2020 H1 2020 9M 2020 2020FY Communication, 3.6% Power, 0.0% Communication 3,291 4,014 2,982 1,932 Others, 30.4% Oil and Gas 16,161 19,309 19,852 4,469 Upstream 347 0 0 0 Construction 1.5% - Downstream 15,301 18,843 19,116 3,559 NPL Analysis - 2020FY Oil & Gas: Upstream, 0.0% Manufacturing, 6.2% Gen. Commerce, 11.7% Oil & Gas: Services 514 467 736 911 Service, 1.7% Transport, 31.2% Power 0 0 0 0 Govt., 0.1% Manufacturing 10,029 9,606 11,715 3,290 Oil & Gas: Downstream, Gen. Commerce 4,849 4,178 4,769 6,221 Consumer, 6.9% 6.7% Transport 14,317 9,949 10,779 16,562 Consumer 2,792 4,012 3,338 3,636 Others, 10.3% Government 164 26 30 Construction Construction 856 3,863 1,763 797 8.0% Agriculture 3,553 3,184 3,404 Oil & Gas: 3,877 Service, 4.0% Real Estate 251 383 381 36 Education 454 468 697 566 Govt., 0.0% NPL Analysis - 2019FY Communication, 3.1% Power, 0.0% Oil & Gas: Upstream, 0.5% Manufacturing, 7.8% Gen. Commerce, 6.2% Fin. & Insurance 6 4 4 598 Others 1,556 2,198 3,351 11,035 Consumer 6.9% X Oil & Gas: Total 58,116 61,334 63,062 53,050 34 =4 Downstream, 35.3% Pressure NPL Sectors Transport, 18.0% www.fidelitybank.ng#35Capital Adequacy Ratio ► Fidelity CAR is well above the regulatory minimum requirement at 18.2% in 2020FY. Excluding the regulatory adjustment, CAR would have come in at 19.7%. ▸ Only fair value reserves were recognised as Tier II Capital: the N30bn Tier II Bonds was repaid in Nov 2020. The newly 10yrs N41.2bn Tier II Bonds was priced on 7th Jan 2021 and will qualify as Tier II Capital from H1 2021 AFS. Impact on CAR is estimated at 210bpts. Capital Adequacy Ratio Computation - Basel II N'billion 2019FY 2020FY VAR Tier 1 Capital 191.7 224.3 32.5 Regulatory Adjustment (10.6) (20.2) 9.6 Adjusted Tier 1 Capital 181.1 204.1 23.0 Tier 2 Capital 33.0 39.6 6.6 Total Qualified Capital 214.1 243.7 29.6 Capital Adequacy Ratio Credit Risk 920.6 1,048.3 127.7 N'billion % Ratio Market Risk 64.2 87.6 23.4 273.5 262.2 Operational Risk 185.8 204.3 18.4 234.0 242.4 250.7 Risk Weighted Assets 1,170.7 1,340.2 169.5 18.3% 17.7% 18.8% 18.2% 18.2% 15.0% 15.0% 15.0% 15.0% 15.0% Capital Adequacy Ratio Tier 1 15.5% 15.2% Tier 2 2.8% 3.0% 2019FY Q1 2020 Total Equity H1 2020 - Fidelity CAR 9M 2020 2020FY Overall CAR 18.3% 18.2% ―Regulatory Minimum 35 55 www.fidelitybank.ng#36Strategic Business Units Analysis Business Description Handles the bank's institutional clients with turnover in excess of 5.0 billion and treasury business PBT Corporate & Investment Banking ➤ Key focus sectors include: Lagos & SW Bank Treasury □ Conglomerates □ Energy (Oil & Gas) ☐ Telecoms Power FMCG ☐ Fintechs Manufacturing Handles retail, commercial, SME customers, and clients not matching the corporate banking criteria etc. ➤ Drives retail deposits, lending, payroll and e-products etc. Operates at 101 locations Location Based Analysis Deposits 12.9% 34.1% Loans 33.6% 35.5% 16.1% 31.0% ➤ Handles retail, commercial, SME customers, and clients not matching the corporate banking criteria etc. North Bank ➤ Drives retail deposits, lending, payroll and e-products etc. 15.3% 22.9% 23.4% ➤ Operates at 59 locations including FCT. South Bank Handles retail, commercial, SME customers, and clients not matching the corporate banking criteria etc. ➤ Drives retail deposits, lending, payroll and e-products etc. Operates at 90 locations 36 27.0% 28.1% 20.1% www.fidelitybank.ng#375. 2020FY Actual Vs. 2021 FY Guidance Hey It's IVY Let's Vibe On WhatsApp Chat with IVY today on 090-3000-0302 to get your banking needs sorted instantly Hello Hello you Fidelity Holla at me for: • Bill Payments Complaints • My Balance • Send Money • ATM/Branch Locator & so much more Add me up and get chatting with IVY. 37 :) Let's vibe! A#382020FY Actual Vs. 2021FY Guidance S/N Index 2020FY Actual GROWTH EXPECTATIONS ON KEY INDICATORS 2020FY Target Comment 2021FY Target 1 PBT N28.0bn N25.8bn Achieved N35.2bn 2 Loan Growth 17.7% 5.0% - 7.5% Achieved 10.0% 15.0% 3 Deposit Growth 38.7% 5.0% 10.0% Achieved 15.0% 20.0% 4 Net Interest Margin 6.3% 5.5% -6.0% Achieved 6.0% - 6.5% 5 Cost to Income Ratio 65.1% 70.0% Achieved Below 65.0% 6 ROAE - Post Tax 10.5% 11.3% Behind Target 12.2% 7 Cost of Risk 1.4% 1.5% Achieved 1.0% - 1.2% 8 NPL Ratio 3.8% Below 5.0% Achieved Below 5.0% 9 Tax Rate 5.0% 10.0% 15.0% Achieved 10.0% 15.0% 10 Proposed Dividends 23.9% 30-50% (of PAT) Behind Target 25-40% (of PAT) 38 38 www.fidelitybank.ng#39Thank You Fidelity Bank Plc 2 Kofo Abayomi Street, Victoria Island, Lagos, Nigeria +234 (01) 4480853 [email protected] www.fidelitybank.ng