#1FirstBank Since 1894 FirstBank Group Results Full Year December 2010 & First Quarter 2011 Presentation to Analysts and Investors RESILIENT DEPENDAB GROWTH EXCELLENCE DEPEND SERSHIP TAL www PROFITABILITY EXCELLENCE GROWTH NOISIAH LEADERSHI PROFDABILITY VICEEXC ISION PRO#2Cautionary Note Regarding Forward Looking Statements FirstBank Since 1894 This presentation is based on the financial results of FirstBank's audited results for the period ended December 31 2010 and unaudited results for the period ended March 31, 2011, consistent with Nigerian GAAP. FirstBank of Nigeria Plc ('FirstBank' or the '‘Group' or the 'Bank') has obtained some information from sources it believes to be credible. Although FirstBank has taken all reasonable care to ensure that all information herein is accurate and correct, FirstBank makes no representation or warranty, express or implied, as to the accuracy, correctness or completeness of the information. In addition, some of the information in this presentation may be condensed or incomplete, and this presentation may not contain all material information in respect of FirstBank. This presentation contains forward-looking statements which reflect management's expectations regarding the group's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "anticipate", "believe”, “expects”, “intend”, “estimate”, “project”, “target”, “risks”, “goals” and similar terms and phrases have been used to identify the forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to the Bank's management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. FirstBank cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain of these risks or factors, reference should be made to the Bank's continuous disclosure materials filed from time to time with the Nigerian banking regulatory authorities. The Bank disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Kindly note that in this presentation, all reference to 9 Mths'09 indicates the period April to December 2009 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 2#3RESILIENT DEPENDAB GROWTH ERSHIPTAL www PROFITABILITY EXCELLENCE YGROWTH EXCELLENCE ADERSHIP PROFIABILITY Outline ELENCE NICEE PROFABRITYG DEPEN HVISIO ROW Highlights & Operating Environment ☐ Speaker: Group Managing Director Financial Review Bisi Onasanya (Slides 4 - 6) ☐ Speaker: Chief Financial Officer Speaker: Chief Risk Officer Bayo Adelabu Remi Odunlami (Slides 7-16) (Slides 17-20) Risk Management & Corporate Governance ☐ Speaker: Chief Risk Officer Strategy & Transformation Remi Odunlami (Slides 21-24) ☐ Speaker: Chief Strategy Officer Onche Ugbabe (Slides 25-35) Summary & Outlook ☐ Speaker: Group Managing Director Bisi Onasanya (Slides 36-39) FirstBank Since 1894 3#4Operating Environment Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Governance Financial Review Headlines for FY 2010 and Q1 2011 - Road Map Highlights Macro Considerations Group Strategic Thrust Improved Deposit Mix Sufficient Liquidity Stable Core Earnings Rising Interest Rate Environment Accelerating Profitability & Margins Rising Oil Prices Relatively Stable Naira Rising Inflation Rate Restructuring for Growth Sequencing Growth Systematically Business Line Expansion International Expansion Bank Strategic Thrust Growth Service Excellence Performance Management FirstBank Investor & Analyst FY'10 & Q1'11 Presentation - 28/04/2011 Talent Management FirstBank Since 1894#5Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Governance Financial Operating Review Environment Highlights What FirstBank Delivered in FY 2010 & Q1 2011 Stronger & liquid balance Sheet Business volume Earnings Profitability . • • Dec 2010 Capital Adequacy Ratio: 20.4% (Dec 09: 15.8%) Tier 1 capital ratio: 17.7% (Dec 09: 13.9%) Net loan to deposit ratio: 79.4% (Dec 09: 80.9%) • Liquidity ratio: 50.9% (Dec 09: 58.7%) NPL ratio: 7.7% (Dec 09: 8.2%) • • • Mar 2011 FirstBank Since 1894 Capital Adequacy Ratio: 19.3% (Mar 10: 19.9%) Tier 1 capital ratio: 16.8% (Mar 10: 16.2%) Net loan to deposit ratio: 79.9% (Mar 10: 76.3%) Liquidity ratio: 32.1% (Mar 10: 67.0%) NPL ratio: 7.3% (Mar 10: 7.9%) YoY growth in deposit of 7.7% to №1.45tn Lending up 5.7% YoY to N1.23tn No of bank branches: 611; ATM: 1,204 YoY growth in deposit of 12.5% to №1.58tn Lending up 17.8% YoY and 9.8% QoQ to N1.26tn No of branches: 619; ATM: 1,241 . Gross earnings at N230.6bn, down 10.8% YoY on annualised numbers Contribution from subsidiaries to gross earnings: 10% Improved gross earnings diversification with non-interest income contributing 24.5% (Dec 09: 16.5%) Gross earnings at N63.3bn, up 1.5% YoY Contribution from subsidiaries to gross earnings: 12% Non-interest income contributing 25.8% (Mar 10: 19.8%) • Profit before tax: N43.2bn (Dec 09: N13.3bn) • Profit before tax: N15.7bn (Mar 10 N5.4bn) Contribution from subsidiaries to profit before tax 22% . Contribution from subsidiaries to profit before tax : 16% After tax ROAE: 10.3% (Dec 09: 2.0%) . After tax ROAE: 15.5% (Mar 10: 15.3%) . After tax ROAA: 1.5% (Dec 09: 0.3%) Basic EPS: N1.02 (Dec 09 NO.23) • After tax ROAA: 2.1% (Mar 10: 2.3%) . Basic EPS: N1.54 from (Mar 10: N1.98) Net interest margin: 6.3% (Dec 09: 7.1%) FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Net interest margin: 6.6% (Mar 10: 5.2%) 5#6Strategy & Summary & Transformation Risk Mgt & Corporate Financial Review Operating Environment Highlights Outlook Governance FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 N 155 Growth in developing economies is expected to remain buoyant at 6.5% 150 With the exception of Nigeria, growth slowed in most of the oil exporting countries in 2010 145 140 135 130 125 The Nigerian Economy ப GDP growth of 7.8% for the year 2010 driven mainly by agriculture, services, wholesale and retail trade Headline inflation growth rate of 11.8% in 2010, YoY growth of 12.8% in March 2011 Increase in monetary policy benchmark rate by 100 basis points to 7.5% in March 2011, to proactively curb inflationary pressures Banking Industry ப ☐ The first three quarters of 2010 were characterised by very low interest rates; pick up in interest rate in Q4 2010 and 2011 AMCON has purchased around 90-92% of NPL's across the industry, creating room for credit generation CBN guarantee on all interbank transactions, foreign credit lines and pension fund placements with banks extended to 30 September 2011 Compulsory adoption of IFRS to begin in the 2012 financial year Some progress made on the recapitalisation of CBN intervened banks 12 8 4 0 Source: CBN Jan-10 Feb-10 Apr-10 May-10 Jul-10 6 Sep-10 Oct-10 Dec-10 Feb-11 % Overnight 16 Positive outlook for growth in the domestic economy as well as African economy in general Global Economy 2010 estimates of world economic growth of 4.8%, predominantly driven by developing economies FirstBank Oil prices and exchange rate Exchange Rate Since 1894 --Oil Prices $ Jan-09 Apr-09 Jul-09 Sep-09 Dec-09 Interbank rates Call --7-Day 30-Day Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 130 110 90 ༡ ིི ཏྱཾ ཋ ཋ ཋ ྴ ཋ 70 50#7Operating Environment Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Governance Financial Review Evolution of group profit after tax (N'bn) 174.0 [162] (52.6) [(65.8)] 56.5 Full year ending December 31, 2010 [31.9] (21.6) [(40.6)] (116.5) [(75.8)] [1.7] 1.5 FirstBank Since 1894 [43.2] 1.9 [4.9] 43.2 33.4 (9.8) [(8.4)] Interest Income Interest Expense Non-Interest Income Net Provisions Operating Expenses Share of Associates Exceptional Item Result Profit Before Tax* Profit After Tax Taxation [] Dec 2009 47.0 [50] (9.4) [(22.3)] First quarter ending March 31, 2011 16.3 [12.4] (3.8) [(1.5)] [15.4] 15.7 (34.3) [(26.2)] (3.1) [(3.1)] [12.3] 12.6 Interest Income [] Mar 2010 Interest Expense Non-Interest Income Net Provisions Operating Expenses Profit Before Taxation Tax* Profit After Tax *Assumption FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 7#8Operating Environment Highlights Gross earnings has remained resilient inspite of the turbulent operating environment. We have made progress in diversifying our income streams and have seen improving traction in revenue generation 196 34 Gross earnings N'bn Interest income Non-interest income 231 62 12 60 122 28 177 55 41 54 57 63 16 162 50 94 136 174 47 FirstBank Since 1894 Gross earnings split by business lines - FY 2010 N231 bn ■Retail & corporate banking 93.8% (Dec 09: 92.5%) Investment & capital markets 3.7% (Dec 09: 5.0%) Other* 1.2% (Dec 09: 0.7%) Asset management 0.9% (Dec 09: 0.9%) ■Mortgage banking 0.4% (Dec 09: 0.8%) Summary & Strategy & Transformation Risk Mgt & Corporate Financial Review Outlook Governance • • • • 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 Comments Gross earnings for full year impacted by drop in asset yields and slow credit growth environment during the period Q1 Gross earnings positively impacted by improving contribution from non-interest income, driven by commission on turnover, credit related fees and foreign exchange income Increased traction in revenue generation in Q1 expected to continue in coming periods, benefiting from higher interest rate environment and improving contribution from fees and commission Improving earning asset mix in favour of higher yielding assets Heightened focus on risk based pricing Retail & corporate banking still the major contributor to earnings, increased focus on driving Investment Banking and Insurance businesses FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Gross earnings split by business Lines - N63 bn - Q1 2011 ■Retail & corporate banking 94.3% (Mar 10: 93.7%) Investment & capital markets 2.1% (Mar 10: 4.5%) Asset management 1.7% (Mar 10: 0.3%) Other* 1.5% (Mar 10: 1.1%) ■Mortgage banking 0.4% (Mar 10: 0.4%) * Includes insurance brokerage, private equity and venture capital, and bureau de change business functions 8#9Environment Operating Highlights Financial Review Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook We proactively responded to the declining yield environment by deliberately focusing on reducing our cost of funds, thus protecting our margins FirstBank Since 1894 68.3% Interest income mix Placements Treasury bills & investment securities Loans and advances Non-interest revenue mix 31.1% 37.6% 39.7% 40.2% 41.6% Other fees and commissions* 51.2% 64.4% 5.2% Remittance 75.4% 71.5% 70.3% 82.6% 12.0% 10.0% 9.4% fees /Management fees 8.7% 7.5% 7.2% 7.8% 3.3% -2.0% 7.0% 0.8% Exchange gain/FX Income 27.3% 33.4% 27.2% 37.0% 29.5% 29.2% Commission on turnover 11.3% 24.0% 18.3% 19.1% 14.9% 20.4% 10.4% Other income** 18.3% 20.2% 23.4% 7.0% 9.8% 10.2% 11.6% 10.6% 14.1% 14.0% 7.9% 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 Asset yield and cost of liabilities Net interest margin Yield on interest earning assets Cost of interest bearing liabilities 10.8% I Net interest income N'bn Net interest margin 6.6% 9.8% 9.4% 8.6% 8.2% 8.3% 6.9% 6.8% ☐ 5.7% 4.5% 3.9% 2.7% 9m'09 Q1'10 H1'10 **Investment income and recoveries 9m'10 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 FY'10 Q1'11 6.4% 6.3% 5.7% 5.7% 5.4% 96 28 57 90 121 38 9m'09 Q1'10 H1'10 *Credit related fees, Financial advisory fees, Commission on insurance premium, Commission on western union transfers, Loss/(Profit) on disposal of property and equipment 9m'10 FY'10 Q1'11 9#10Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Highlights Our operating expenses have trended largely in line with inflation. We expect improvements as certain one-off costs drop off Operating income and expenditure FirstBank Operating expense breakdown (N'bn) Since 1894 Staff cost Operating income (N'bn) Operating expenses (N'bn) QoQ operating expenses growth % X QoQ operating income growth % 12.1 13.1 11.9 1.5 ✗ -9.6 13.3 6.3 A 5.3 1.5 -1.5 -12.5 Depreciation Admin and general expenses NDIC premium 7 6% 48 42% 6 7% 4 5% 28 36% 6 7% 32 38% 8 7% 4 7% 6 7% 21 38% 2 7% 4 7% 7% 17 39% 10 39% 131 78 2 7% 40 26 86 55 130 84 178 117 54 34 41 52% 26 48% 41 48% 52 45% 46% 2 7% 14 46% 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 9m'09 Q1'10 9m'10 FY'10 Q1'11 161 8% 1% 10 20% 20 12% 0.3 1% 19 12% 6 13% Corporate office* Private banking 5 11% Corporate banking 77 Public sector banking 48% . 21 42% ■Retail banking Operating income breakdown by SBU N'bn (bank only) 212 49 • H1'10 Comments Operating income benefiting from rise in yields, non-interest revenue and decline in interest expense Benefits from manning structure realignment and branch optimisation being realised; staff numbers on the decline despite increasing number of branches Significant reduction in our cost of funds Full year cost to income ratio negatively impacted by declining yields on the topline and rising operating expenses; marginal improvement in Q1'11 1% general provision on performing loans taken in 2010 Focus on driving targeted containment in operating expense through increased awareness and more efficient resource allocation Institutional banking • 31 19% 7 13% Various initiatives in place to reduce costs such as: Introduction of standardized processes across Bank's divisions to increase efficiency, centralization of branch operations to enhance economies of scale, focus on channel migration Dec-10 Mar-11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 *Corporate office includes money market lines, treasury, investments and staff welfare loans 10#11Financial Review Operating Environment Highlights Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Sustained improvement in asset quality indicators 40.6 Provision for credit and other losses (N'bn) 5.7 21.6 3.8 (1.5) (1.0) 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 63.2 43.7 0.1 63.1 Movement in loan loss provision (N'bn) 11.4 (9.6) General provision 87.4 80.1 7.3 11.4 (28.6) 11.4 75.9 68.6 FirstBank Since 1894 Comments Proactive recognition of 1% general provision in FY 2010 amounting to an №11.4 billion provision on our performing loan book Recovery remains a major priority as evidenced by a N9.6 billion in provisions no longer required Cost efficiency (%) ■Pre-provisioning cost to income Post-provisioning cost to income 60 83 65 62 63 64 65 80 69 102 64 71 1-Jan-101 Additional Provision - Non Additional Provision - Provision no longer Amount w/off 30-Dec-10 required Performing Performing Additional Provision Non- performing 31-Mar-11 Q3'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 11#12Summary & Strategy & Transformation Risk Mgt & Outlook Corporate Governance Highlights Steady improvement in profitability Profit before and after tax (N'bn) PBT PAT 12 5 15 12 32 25 41 33 43 33 16 13 FirstBank Since 1894 FY 2010 PBT split by business lines N43 bn Retail & corporate banking 84.7% (Dec 09: 49.4%) Asset management 6.7% (Dec 09:31.0%) Investment & capital markets 6.2% (Dec 09: 12.5%) Other 2.2% (Dec 09: 6.4%) Mortgage banking 0.1% (Dec 09: 0.6%) • • 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 Comments Results positively impacted by improvement in interest rates towards the end of the year Profitability benefiting largely from reduced funding costs • PBT impacted by general provisions • • • Slight growth of 1.5% in Q1 profits when compared to corresponding period in 2010, profits positively impacted by reduced interest expense as well as improved contribution of non-interest income to revenue Strong focus on improving processes at both the group and bank level, in order to drive increased non-interest revenue contribution Increased focus on further optimising our balance sheet to drive enhanced yield Q1 2011 PBT split by business lines N16 bn Retail & corporate banking 91.3% (Mar 10: 69.6%) Investment & capital markets 4.3% (Mar 10: 9.7%) Asset management 1.7% (Mar 10: 18.1%) Other* 2.6% (Mar 10: 1.8%) Mortgage banking 0.1% (Mar 10: 0.4%) FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 * Includes insurance brokerage, private equity and venture capital, and bureau de change business functions 12#13Strategy & Risk Mgt & Summary & Outlook Transformation Corporate Financial Review Operating Environment Highlights Governance Improving profitability and shareholder return metrics, benefitting from increasing leverage Return on average equity Shareholders funds N'bn ROAE Return on average assets Total assets N'bn FirstBank ROAA Since 1894 30.8% 27.9% 16.8% 3.6% 2.0% 10.3% 15.5% 64 84 352 337 311 341 341 2006 3.2% 3.0% 2.7% 1.5% 2.1% 0.7% 0.3% 617 911 1,528 2,010 2,174 НИ 2,305 2496 2006 2007 2008 Mar-09 Dec-09 2010 Q1'11 2007 2008 Mar-09 Dec-09 2010 Q1'11 Per share matrices I Dividend yield % DPS N EPS N 2.94 1.78 2.67 1.35 1.2 1.02 0.6 0.51 0.11 10.3 5.0 4.2 11.2 0.10 0.8 4.4 2006 2007 2008 Mar-09 Dec-09 2010 Q1'11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 1.54 13#14Operating Environment Highlights Financial Review Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook We have continued to maintain a strong and stable funding base, with deposit liabilities providing 63% of balance sheet funding, whilst continually improving the mix of deposits Balance sheet structure as at Mar 11 (N'bn) 2,496 131 131 Other Assets 5% [5%] Managed Funds 1% [2%] Investments 19% [16%] 472 Deposit (N'bn) FirstBank Since 1894 2,496 Other Liabilities 7% [6%] Bank 183 115 Other Borrowings 5% [5%] Subsidiaries 1,550 1,582 1,407 243 Due to Other Banks 10% ([%] 1,347 110 67 1,427 113 184 1,451 120 195 Treasury Bills 1% [1%] 36 Inter Bank & Cash 22% 32 559 [27%] 341 Short Term Liabilities 1% [4%] Capital & Reserves 14% [15%] [ ] Dec 2010 Assets Liabilities Loans & Advances 51% Deposits 63% ([3%] [50%] 1,264 1,582 1,340 1,237 1,314 1,367 1,331 1,388 Deposit mix by type Current deposits Savings deposits Term deposits Domiciliary deposit Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Deposits by maturity 0-30 days 1-3 months 3-6 months 6-12 months Over 12 months 8.8% 8.8% 13.7% 15.2% 12.2% 12.1% 9.2% 8.5% 9.2% 10.2% 9.6% 10.1% 9.1% 15.0% 16.0% 24.9% 31.5% 18.9% 16.0% 19.0% 18.0% 16.3% 16.6% 17.4% 25.0% 13.9% 14.1% 14.0% 14.8% 15.6% 27.5% 19.7% 29.1% 28.0% 26.7% 27.3% 25.4% 21.3% 24.1% 23.4% 22.9% 22.8% FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 40.0% 38.8% 38.2% 40.8% 42.0% 42.6% 35.4% 37.2% 36.6% 36.1% 36.1% 34.0% Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 14#15Summary & Strategy & Transformation Outlook Risk Mgt & Corporate Governance Financial Review Operating Environment Highlights We will maintain our focus on optimising our balance sheet, as we look to move our funds to higher yielding assets Deposits by SBU (bank only) 80.9% A1.3 th 2% 7% A1.4 th 1% 7% FirstBank Interest earning assets (N'bn) 1,988 2,210 263 13.2% 398 18.0% Since 1894 23% 23% Corporate office* Private banking Corporate banking 23 550 27.7% 1.2% 513 23.2% 36 1.6% Investment Due from other banks 54% Public sector banking 52% Treasury bills Retail banking Loans and advances Institutional banking 13% 13% 1151 57.9% 1264 57.2% Dec-10 Mar-11 Balance sheet efficiency Leverage ratio (times) Loan to deposit ratio 76.3% 76.7% 74.1% 79.4% 79.9% 6.5 7.0 7.4 7.3 7.8 6.8 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Dec-10 Mar-11 • • Comments Percentage of cheap deposits has continued to improve - from 68.5% to 80.9% as at end of December and 82% as at end of Q1 Foreign currency deposits represent 12.3% of our deposits base The retail and public sector segments constitute the largest segments for generation of cheap liabilities to lever our balance sheet Focus on increasing the depth and breadth of our transactional banking capabilities to capture flow through from current accounts in the corporate banking segment *Corporate office includes money market lines, treasury, investments and staff welfare loans 15#16Summary & Strategy & Transformation Outlook Risk Mgt & Corporate Governance Financial Operating Review Environment Highlights Our capital and liquidity ratios remain strong and in excess of regulatory requirements Comments Our capital management approach is driven by strategic and organisational requirements, taking into account the regulatory and commercial environment in which we operate It is our policy to maintain a strong capital base to support the development of our business and to meet regulatory capital requirements at all times 58.8% Evolution of capital and liquidity ratios FirstBank Since 1894 67.0% 64.8% 63.5% 54.4% 50.9% 42.9% 42.3% 42.1% 41.3% We will focus on the deliberate improvement of our capital ratios in the coming periods 40.4% Components of capital Tier 1 Capital Tier 2 Capital 19.9% 18.0% 17.0% 15.8% 32.1% 20.4% 19.3% 16.2% 16.3% 16.8% 15.4% 13.9% 51 50 17.7% 32 32 69 31 32 303 303 303 304 335 335 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 2,184 1,694 1,733 1,857 1,893 1,856 9m'09 Q1'10 H1'10 9m'10 FY'10 Q1'11 Total RWA (N'bn) Total capital adequacy ratio % Liquidity ratio (Bank) Tier 1 capital ratio % Liquidity ratio (Group) 16#17Operating Environment Highlights Financial Review Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Steady growth in loan book in a measured and focused manner Gross loans and advances - group (N'bn) Bank Subsidiaries Provisions 1,351 1,231 1,198 87 1.4% 9.9% 15% 6.8% €5% 1.5% 1,152 1,144 1,140 80 59 158 63 70 46 97 126 56 99 113 FirstBank Loans and advances by type Overdraft Term loans Commercial papers ■Money market lines 1.4% 8.5% 12.7% 10.2% 10.3% 12.7% 75.2% 74.7% 77.5% 76.3% 63.4% 62.8% 1,033 975 981 1,043 1,025 1106 14.0% 16.6% 14.4% 13.9% 13.8% 14.2% 9 Mths'09 Q1'10 H1'10 9 Mths'10 FY'10 Q1'11 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Ageing analysis of performing loan book (bank only) 0-30 Days ■31 - 60 Days > 61 Days 12.4% 10.4% 1.6% 2.5% 8.5% 2.2% 9.0% 3.4% 10.6% 1.8% • • • Comments 18% and 10% YoY and QoQ growth in loan book We remain the largest lender across the industry, with a well diversified loan book Loan growth driven predominantly by corporate and retail customers; key sectors responsible for the loan growth are agriculture and oil & gas 85.1% 88.0% 89.3% 87.6% 87.6% • Our single largest exposure remains to seawolf • Mar-10 Jun-10 Sep-10 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Dec-10 Mar-11 • Continued validation of our credit generation process and risk acceptance criteria to align with assets quality targets Continued focus on proactive remedial management and recovery 17 Since 1894#18Environment Operating Highlights Summary & Transformation Strategy & Outlook Risk Mgt & Corporate Governance Financial Review .with Loan book well diversified across a number of sectors 1,128 Breakdown by SBU's N'bn (Bank only) 1,218 179 16% 190 16% 170 15% 226 19% 71 6% 95 Corporate office* 8% Corporate banking 192 17% 220 18% Public sector banking Retail banking Institutional banking 516 46% 487 40% Dec-10 Mar-11 Gross loans and advances (sector exposure) Mar 2011 (bank only) Oil & gas upstream Oil & gas downstream 13% (Dec 10: 10%) Oil & gas services 13% (13%) 1% (Dec 10: 0.1%). Capital market 2% (Dec 10: 2%) Real estate - Construction 4% (Dec 10: 5%) Real estate - Commercial 2% (2%) Real estate - residential 3% (Dec 10:3%) Government 6% (Dec 10: 7%) Personal & professional 5% (Dec 10: 6%) 41.2 tn General✶✶✶ 9% (Dec 10: 10%) Finance and insurance 14% Information and communication 6% General commerce (Dec 10: 19%) (Dec 10: 6%) 9% (Dec 10: 8%) Others** 3% (Dec 10: 2%) Manufacturing 9% (Dec 10: 8%) **Others include agriculture, construction, power & energy and transportation FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 FirstBank Since 1894 Comments Foreign currency loans stand at N250 billion (21% of loan portfolio) Facilities against shares now represent 1.6% of total loan portfolio Expected sector for growth during the year are agriculture, oil & gas, construction, power and transportation Core consumer/retail product portfolio Co-operatives 6.6% (Dec 10: 6.1%) Asset backed - retail 2.2% (Dec 10: 2.3%) Personal loan 4.1% (Dec 10: 3.8%) Home loan 20.7% (Dec 10: 19.9%) N176 bn Asset backed - ,consumer 64.8% (Dec 10: 66.1%) Consumer auto loan 1.6% (Dec 10: 1.8%) *Corporate office includes money market lines, treasury, investments and staff welfare loans ***Hotels& leisure, logistics, retail others and religious bodies 18#19Operating Environment Highlights Financial Review Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Sustained improvement in asset quality 67.1% Asset quality ratios NPL N'bn NPL coverage -- NPL % Cost of risk 87.8% 84.2% 77.2% 70.1% 71.5% 8.2% 7.9% 5.7% 5.8% 7.7% 7.3% ㅁ 4.3% -0.2% -0.1% 0.5% 1.8% 0.3% 94 91 65 70 94 99 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 91 NPLs by SBU's N'bn (bank only) 96 FirstBank Since 1894 NPL Sector exposure Mar 11 (bank only) Retail others 24.1% (Dec 10: 22.0%), 24.1% Others 1.8% Agriculture (Dec 10: 1.5%) 4.4% (Dec 10: 2.5%) Manufacturing 1.7% (Dec 10: 1.8%) Construction .1.5% (Dec 10: 1.4%) • • • • Oil downstream 4.0% (Dec 10: 4.0%) N95.8 tn Oil & gas services 12.0% (Dec 10: 11.6%) Capital market 3.7% (4.7%) Commercial property 3.1% (Dec 10: 5.7%) Comments General commerce 5.8% (Dec 10: 5.3%) Information and communication 1.4% (Dec 10: 2.5%) Real estate construction 25.9% (Dec 10: Residential 24.1%) mortgage 13.3% (Dec 10: 12.9%) NPL portfolio reflects the broad based nature of our loan book, cutting across various economic segments Improving asset quality across various matrices In December 2010, we sold toxic loans worth 10.5 billion to AMCON in exchange for bonds worth 5.9 billion Q1 2011 results do not reflect the impact of the 2nd tranche of NPLs to be sold to AMCON, estimated at N31 billion Independent recovery efforts have been extended to cover substantial and doubtful accounts Real estate construction within institutional banking remains a key risk segment; strategy is to finish the projects and realise the proceeds *Others include water supply, finance and insurance, power & energy, government and transportation 43 47.0% 53.2% 51 Retail banking Public sector banking • 0.1 -0.1% 1.4 1.5% Institutional banking 28 29.2% Corporate office 33 36.1% Corporate banking 0.8 09%====== 0.9 0.9% 15 15.9% 15.2% 15 Dec-10 Mar-11 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 19#20Operating Environment Highlights Summary & Strategy & Transformation Outlook Risk Mgt & Corporate Governance Financial Review 9% 906 1% 90 We are gradually working out the concentration risks 35.6% 23.3% Ageing analysis of NPL portfolio (bank only) 90 179 days 180 359 days I above 360 days 26.6% 32.4% 40.5% 40.8% 44.8% 52.7% Dec-09 Mar-10 1% 2% 43.7% 33.1% 30.4% 39.2% 34.5% 29.7% 19.5% 24.0% 28.8% 20.3% 15% Jun-10 Sep-10 Sector NPL Ratio's (bank only) 35.5% 3.5% 18.3% 5.2% 15.6% 22.9% 21.4% 17.7% 11.3% 12.9% 5.6% 5.1% 5.3% 4.5% FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Retail others General commerce 9% 27% Oil & gas Dec-10 ■Mar-11 Transportation and storage Dec-10 Mar-11 % of Loan Book as at Mar-11 1% 2.3% 3.2% 6% 3.2% 1.9% 9% 1.8% 1.5% 14% 0.5% 0.7% 7% 0.4% 0.3% 0.1% 0.8% 0.0% Information and communication Manufacturing Finance and insurance Government 20 20 Power and energy FirstBank Since 1894#21Operating Environment Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Financial Corporate Governance Review Risk management framework (1 of 2) Detailed framework and disclosure • • FirstBank Best in class risk management practice Publication of risk management disclosures, an integral part of FirstBank annual report Risk Management Framework Risk Appetite Asset quality • A conservative balance is maintained between risk and revenue considerations Appetite for risk is governed by high quality assets measured by the following three key performance indicators: ratio of non-performing loans to total loans ratio of loan loss expenses to interest revenue: and ratio of loan loss provision to gross non-performing loans No sector on the Group's portfolio gives cause for serious concern • Performing accounts are marked to market Board Credit Committee • Adequate provisions are made Technology Statistical analysis system is being implemented FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Board of Directors Board Audit and Risk Assessment GMD/MCC GMD/MANCO² 2 ED/CRO 3 Internal Audit 1 Group Managing Director/Management Credit Committee 2 Group Managing Director/Management Committee 3 Executive Director/ Chief risk Officer 21 Since 1894#22Operating Environment Risk Mgt & Corporate Governance Financial Review Strategy & Transformation Summary & Outlook Highlights Risk Management framework (2 of 2) Credit risk FirstBank Creation of loans and management of the risks inherent in the loan portfolio remained a focal point A special recovery unit has been set up to revamp recovery strategy, to implement recovery initiatives that would ensure provisions taken in prior periods are reversed Market and liquidity risk Increased market confidence and perception of the bank as strong and reliable Healthy liquidity position has been maintained Environmental and social risk Operational risk • Environmental and social risk management system policy being implemented This is aimed at promoting environmental soundness and sustainable development in a socially responsible manner especially in large ticket project financing Through management focus and resources the operational risk has been managed within acceptable levels We continue to work at minimising operational losses by strengthening control mechanism's • To achieve timely prevention and detection of fraud, an internal control antifraud automated system software was recently deployed Information security risk Obtained ISO27001 certification from British Standard Institute. • The certification is the world's highest accreditation for information protection and security from the international Organisation for Standardisation (ISO) FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Legal and compliance Risk Improvement of access to sound legal advice and the awareness of the need to identify, mitigate and manage legal risks Compliance risks are being identified and mitigated through continuous improvement in technology infrastructure, process rejuvenation/revalidation and training of stakeholders to understand regulatory obligations and consequences of non-compliance. 22 Since 1894#23Risk Mgt & Corporate Financial Review Strategy & Transformation Summary & Outlook Governance Operating Environment Highlights Directors Total Seamless transition on the Board demonstrating institutionalised succession planning FirstBank Since 1894 Corporate Governance Framework Board December Members 2009 December 2010 Executive 8 5 FirstBank Board Directors Non Executive 9 11 17 16 • Continued Board restructuring around the principle that the predominance of non- executive would improve objectivity and independent judgement. Ratio of executive directors to non executive directors is 1:2. This is in line with the provision of the corporate governance code • In addition to the independent non executive director on our board, we intend fast-tracking the appointment of a second independent director in compliance with the corporate governance code. • The Board performs its responsibilities through standing committees whose charters are reviewed regularly ManCo Asset & Liability Committee ManCo General ExCo General MANCO Credit FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Shareholders ExCo Governance Committee Finance & General Purpose Committee Audit & Risk Mgmt Committee Credit Committee Audit Committee Statutory Committee Board Committee Management Committee 23#24EXCELLEN Board changes FirstBank Since 1894 Highlights Summary & Transformation Strategy & Risk Mgt & Corporate Financial Review Operating Environment Outlook Governance Effective Date Reason Resignations Directors Dr. Oba Otudeko, OFR Alhaji Abdulahi Mahmound Position Chairman Lt. General Garba Duba (Rtd) Mr Oye Hassan-Odukale, MFR Non Executive Director Non Executive Director Non Executive Director December 31, 2010 December 31, 2010 December 31, 2010 December 31, 2010 In Compliance with the CBN's code of corporate governance stipulating 12 years maximum tenure for Non executive directors Dr. Yerima Ngama Mrs Bola Adesola Executive Director Executive Director Mr Oladele Oyelola Executive Director December 31, 2010 July 15, 2010 July 15, 2010 Voluntary Voluntary Voluntary Dr. Abdu Abubakar Executive Director July 15, 2010 Voluntary Appointments Prince Ajibola Afonja A non executive director before his appointment as the Chairman Mr Ambrose Feese Name of presentation - XX/XX/2011 Chairman Mrs Ibukun Awosika Mr Ebenezer Jolaoso Alhaji Lawal Ibrahim Mallam Ibrahim Waziri Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Mrs Khadijah Alao-Straub Mr Obafemi Otudeko Mr Tunde Hassan-Odukale Mallam Bello Maccido Non Executive Director Non Executive Director Non Executive Director Executive Director January 1, 2011 October 28, 2010 October 28, 2010 October 28, 2010 October 28, 2010 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 January 1, 2011 To fill vacancy of the Chairman To fill the anticipated vacancy of the above resignations and inject fresh thinking into the Board 24 24#25Risk Mgt & Corporate Governance Financial Review Operating Environment Highlights 2 1 At the Group level, our growth agenda is to be structured with shifting emphasis over time and designed to grow at a sustainable pace Restructuring for Growth • Robust governance framework to provide oversight functions for subsidiaries and ensure proper governance/co-ordination across the Group • Over the last year, we focused on aligning our proposed approach with evolving regulation • 2011 aspiration will centre on effectively capturing Group synergies as an integrated financial solutions provider FirstBank Priorities by growth horizon DIVERSIFY GROUP AND TRANSFORM BANK Since 1894 BUILD SCALE INTERNATIONALLY Business Line Expansion • • Harnessing growth potential in all of our core businesses, whilst making adjustments to our platform to take account of the market opportunities 2011 focus will be to fast track the growth of market share for key non-banking businesses i.e. IBAM and Insurance Targeting growth potential in our core business and targeting the strong FirstBank platform CONSOLIDATE IN NIGERIA ⚫Driveorganic and inorganic expansion Continue aggressivbank transformation •Structure fogrowth in inv. banking and insurance ⚫Rep office expansion; iniSSA explorations Shortterm * Drive bank transformation completion • Build scalen inv.banking and insurance antèverage group synergies • CommencSSA regional expansion earnest ⚫Significant SSA expansion and growthin banking with selective international forays in nbank financial services ⚫Focus ordriving economies of scale and scopacross. international network and portfolio obusinesses Medium term Long term Summary & Strategy & Transformation Outlook 3 International Expansion ■ Over the long-term, our priority will be to drive growth internationally with an emphasis in the near-term on establishing a presence in priority nations in a cost- effective but capital efficient manner ■ International expansion will be implemented via a combination of acquisitions and greenfield expansion as appropriate, guided by the overall objective that the Bank plays competitively in each new market ■ International acquisition would be benchmarked against preset internal targets for acquisition FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 25#26Operating Environment Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Financial Review Governance We have restructured at the group level to enhance portfolio optimisation, coordination and reduce risks and duplications across our businesses FirstBank Proposed HoldCo Structure FirstBank Since 1894 Group Holdco Group Management Committee FBN Holdings Plc Business Groups First Bank of Nigeria FBN Capital FBN Life Assurance FBN Real Estate FBN Bank (UK) FBN Securities Business Units FBN Insurance Brokers FBN Microfinance FBN BDC First Funds FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 First Trustees FBN Mortgages First Registrars First Pension Custodian* ■ Structure for the FirstBank Group would achieve full compliance with the CBN's requirements to ring-fence the operations and business of the bank (First Bank) from non-banking businesses as prescribed in the new banking regulations. ■ Awaiting final approval from CBN on proposed structure * First Pension Custodian to report directly to FBN Holdings subject to PENCOM approval 26#27Financial Review Operating Environment Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Highlights dimensions At the Bank level, the thrust of our strategy over the medium term is to defend our leadership position, while extending it across key FirstBank Since 1894 Our Vision To be the clear leader and Nigeria's bank of first choice Our Mission Our Objective Defend Defend our strong leadership position with respect to balance sheet (total assets, deposits etc) Extend Balance Extend our performance to attain leading positions in terms of profitability, capital efficiency and operational efficiency and effectiveness Balance short-term performance with long-term health (delivering strong near-term earnings while making requisite investment for long term growth) Lead Attain a market leadership position in each strategic business unit To remain true to our name by providing the best financial services possible Regionalise Extend our franchise into select promising markets in Sub-Saharan Africa FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 27#28Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Financial Operating Review Environment Governance The Bank's strategic framework combines initiatives at the SBU and corporate level and identifies levers that are crucial to performance PROJECT MANAGEMENT OFFICE (PMO) BANK STRATEGY FirstBank Since 1894 FINANCIAL PRIORITIES SBU FOCUS ■ Commission & Fee increase Leverage/low cost liability generation IBG Retail Affluent/SME segments and continued drive for low-cost funding Improved value proposition/capabilities to serve largest corporations NON-FINANCIAL PRIORITIES ■ Performance management ■ Talent management Brand transformation Selective creation of loans and advances CBG Lending at managed risk; improving penetration of mid-corporates ◉ Operational excellence ■ Risk-based pricing ■ OPEX containment Private Differentiated service model for HNIs as platform for viable new business ☐ Credit quality/process management Public Bank of choice for government bodies at Sector the Federal and State levels FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Monitoring/Controlling / Coordination 28#29Summary & Strategy & Transformation Risk Mgt & Corporate Financial Review Operating Environment Highlights Outlook Governance We have defined clear value propositions for each SBU to highlight its specific role within the overall strategy of the Bank Macro SBU strategy - getting the big picture Inst Banking (IBG) Increased complexity/sophistication with product offerings; focus on more tailored client solutions Value chain banking Drive asset creation Increased (smart) syndicated lending Corp Banking (CBG) Increase transaction volumes to drive non- interest income particularly with trade financing Asset creation (lower ticket loans with more customers) Risk-based pricing to reflect risk taken SME Private Banking Differentiated sales/service model FirstBank Since 1894 Increased AUM growth to drive associated fees/commissions Cross-selling other Group/Bank products Public Sector Provide value-added services such as payments/collections Increased asset creation through collaboration with IBAM/IBG Continue deposit drive Private Banking Public Sector B Affluent 030 Mass Market Retail Banking Deposit mobilisation to drive low cost funding Customer acquisition with youth and affluent segments Reduce cost to serve mass market segment Increased consumer lending H Local Government Business FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Individuals Public 29#30Summary & Strategy & Transformation Risk Mgt & Corporate Financial Review Operating Environment Highlights Outlook Governance We have continued to transform our service delivery based on customer feedback and our competitive environment FirstBank Since 1894 Transforming Service Delivery Centralised Processing Branch Transformation Manning/Front-Line Transformation Issue Resolution/ Customer Experience & Branch Process reengineering Channel Optimization & Migration Continuously identify and resolve customer issues; monitor our customer experience, and prioritize improvements based on customer feedback • Centralise transactional processes and optimise branch processes, to drive standardisation, reduce transaction processing times, and decongest the branches. . Improve our branch ambience, increase awareness of our products & services, and encourage customer migration to alternative channels Optimise our manning structure, empower staff, and align our front- line staff with our service delivery mandate Optimise costs and increase customer satisfaction by ensuring alternative channels work, and migrating customers to appropriate channel (based on segment needs and requirements) CUSTOMERS RST FirstContact welcome to FirstBank 0700 FIRSTCONTACT (0700-34778-2668228) [email protected] Truly the first FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 M Firstan CHEQUE CONFIRMATION WHAT YOU NEED OPTIONS customer care BRANCH OPERATIONS MANAGER HEAD FUNDS TRANSFER HEAD SERVICE HEAD CASH OPERATIONS Secreta HEAD CLEARING HEAD CREDIT &SUPPORT TREASURY OPERATIONS FUNDS ACCOUNT ATM CUSTODIAN HEAD TELLER TRANSFER OPENING! ACCOUNTS& CREDIT& CLEARINO MONITORINO OFFICER NAINTENANCE OFFICER OFFICER How way You may help you? FOREIGN CUSTOMER TELLERS BULKTELLER OFFICER CARE OFFICER OPERATIONS TREASURY SUPPORT & ADMINOFFICER OPERATIONS OFFICER MONE! EBSMESS TRANSFER OFFICER SUPPORT OFFICERS NOTE COUNTERS & SORTERS ATM GALLERY INTERNET BANKING 30#31Financial Review Operating Environment Risk Mgt & Corporate Governance Summary & Strategy & Transformation Outlook Highlights Branch Centralised Processing Centre: Setup Strategic Delivery - Service Excellence CPC & Branch Process Re-engineering: Full rollout of our centralised processing centre in progress, with benefits being realised across multiple dimensions. FirstBank Since 1894 Branch Branch FirstContact CPC Branch Growth Customer Satisfaction Key Performance Measures Faster implementation of new processes/process changes • Improved cycle time • Reduced error rates Example results •COT amendment setup implementation ~65% reduction in account opening cycle time 10 ~ 70% reduction in salary processing time Efficiency • Lower fixed cost Branch Standardisation per transaction • Improved compliance and controls • 70/30 noncore to core staffing model • Successful staff redeployment (in tandem with branch restructuring exercise) • 81% reduction in regulatory exceptions in CPC branches • Account Opening: 47 branches (+25 in Q1) • Salary processing: 254 branches (+45 in Q1) • Retail Loan Processing: 51 branches FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 31#32Operating Environment Summary & Strategy & Transformation Risk Mgt & Corporate Financial Review Outlook Governance Highlights 3) t ts CT S... Strategic Delivery - Service Excellence Branch Transformation: We have rolled out 20+ branches since our initial 'proof of concept' last year, with positive responses from customer and staff alike FirstBank Since 1894 A matter of choice ATM GALLERY VISA Beyond Cash Verv James Parent Cash Withdravas Recharge Vending Mini Starest Erstlick FirstBirk FirstBank ATM Gallery INTERNET BANKING Internet Banking/Self Service Area FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 we're satisfied what can we do for you today? only when you are. FirstBank Customer Care Teller Area Bank ince 1894 32#33Summary & Strategy & Transformation Risk Mgt & Corporate Financial Review Operating Environment Highlights Outlook Governance Strategic Delivery - Service Excellence Branch Transformation: Driving awareness on key product offerings ("DID YOU KNOW"?) is also a major area of focus FirstBank Since 1894 Did you know? You can make deposits into your account without even standing in line at the teller area... FirstBank Online So why queue? Use a Cash Deposit ATM today! FirstBank FirstMobile Did you know? You can get notifications on transactions made on your account within seconds by sms or e-mail... FirstAlert did you know? you can pay bills, top up airtime and transfer funds using your mobile phone... did you know? you can get information on your account and any FirstBank product & service 24/7... ...so why queue? Sign up and go mobile right away! FirstBank FirstContact Since 1894 did you know? you can confirm your cheques anywhere, anytime, online or through FirstContact... ...so why wait? Sign up for online banking and a token today! ...so why wait? Sign up for FirstAlert today! FirstBank Cheque Confirmation FirstBank Since 1894 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 ...so why wait? Call FirstContact today on 0700-FIRSTCONTACT (0700-347782668228) FirstBank Since 1894 Did you know? You can check your balance, confirm cheques, print account statements and transfer funds, anywhere and anytime... FirstBank Online why wait? Sign up or First Bank Online today! FirstBank 33#34Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Financial Review Operating Environment Highlights Governance Strategic Delivery - Service Excellence Channel Optimization & Migration: Improving ATM migration rate is top priority; driving online banking and contact centre awareness/usage also key FirstBank Since 1894 ATM Optimization Internet Banking Key Initiatives • Increased withdrawal limit on ATMs to N100,000/day • . Revising process of issuing cards and PINS, with expectation of increased efficiency and improved turnaround time Enhanced monitoring tool to inform ATM custodians of the state of their ATMs 24/7 (to drive uptime) Impact • Sustained ATM uptime of ~90% • Increased migration rate from ~50% at end of q4, to ~58% at end of q1 2011, despite increase in withdrawal limits from 60k to 100k. Key Initiatives • Major revamp of internet banking system underway, with objective of increasing functionality, usability, and ease of sign-up • Continued push to increase awareness of internet banking features and improve sign- up turnaround time Impact 170% percent growth in active usage from Q4 2010 to Q1 2011 • ~15% growth in user signup rate Contact Centre • FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Key Initiatives . Increase of Contact Centre functionality underway • IVR service options . Language options Ongoing awareness of contact centre features, including VOIP phones deployed in select branches Impact • ~30% growth in average monthly call volume from Q4 2010 to Q1 2011 • ~30% growth in average email volume from Q4 2010 to Q1 2011 34#35Financial Operating Review Environment Highlights Strategy & Transformation Risk Mgt & Corporate Governance Summary & Outlook Strategic Delivery - Operational Excellence Cost Optimisation: We continue to identify new opportunities to optimise cost along our major themes, while continuing to realise benefits over time through already implemented initiatives Projects Quick-Wins Description Execute quick-win cost optimisation initiatives- waste items with little to no impact on strategy/employee morale; sustainable long- term; can be done in a relatively quick time frame FirstBank Since 1894 New initiatives (i.e. since Q4 2010) • N/A Manning Structure • Assess current manning levels and manning approach (with an initial focus on branch operations), and identify ways to improve our operating efficiency and provide more satisfying jobs for our staff Execution ongoing through implementation of new operations structure Expense Control • Review current expense control policies and procedures, and identify opportunities for improvement, especially for controllable costs • Continued rollout of Fuel card to new locations Diesel purchase management in Branches • Depreciation/ Maintenance • Review 'big-ticket' maintenance items and identify areas where we can eliminate and/or optimise our maintenance spend • Evaluate alternative business models for our existing operations (e.g. outsourcing, in- sourcing, leasing, etc) • H/O Managed Print Services FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 35#36Highlights Summary & Strategy & Transformation Outlook Corporate Risk Mgt & Governance Financial Review Operating Environment Nigerian banking space still in "early" stage and offers an attractive outlook Stages of evolution Bank focus Volume / Growth FirstBank Profit Value Since 1894 Share of population banked Starting development Emerging Consolidation/ maturing Market features Limited financial inclusion ◉ Growing penetration (<50% of population banked) National banks dominate " Growth of consumer sector ■ Emergence of capital markets Mass banking services emerge (<80% of population banked) Multiple products offered Examples Angola 2 Banked population Telco ~10% of total population -30% penetration¹) FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 ~ 17% of total population (~30% of adults) -50% Mature Credit/GDP " High penetration (>80% of population banked) South Africa ~30% of population (~60% of adults) -90% UK ~ 60% of population (~94% of adults) >100% 1) Mobile phones in circulation/100 inhabitants Source: ICT, FirstBank 36#37Operating Environment Highlights Emerging from a period of radical change, the outlook for the banking. industry is very positive and provides significant opportunities for us FirstBank Since 1894 Trends Alternative sources of funding ■ Increase in bond and equity markets issues Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Governance Financial Review Customer Increasing sophistication and decreasing loyalty of customers Nigerian ☐ Differentiation of sales and Banking Industry services according to segments ■ Increase of banked population Competition " Strengthened capital of acquired banks Differentiated business models Price competition in plain vanilla lending ■ Increased foreign presence within key banking segments FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 Regulatory/ structural changes Repeal of universal banking Recapitalisation and AMCON ■ Shared services initiatives ■ Promotion of lending to critical sectors Technology Electronic sales and service channels (i.e. ATM, POS, Internet/Mobile banking) become viable alternatives ■ Licenses issued for Mobile Payments services Consolidation Number of Banks 89 99 24 ? 2003 2005 2011 37#38Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Governance Financial Review Operating Environment In spite of the recent turbulence, strong growth is expected in the Nigerian banking sector over the next few years [N bn, %] Total Assets CAGR +29% CAGR +24% 6,738 10,431 15,920 17,523 18,574 22,846 28,558 35,697 CAGR +35% CAGR +25% 3,449 5,363 8,410 9,538 11,446 14,307 17,884 22,355 Total Deposits CAGR -7% CAGR +10% 2,7% 2,9% 2,9% 2,1% 2,3% 2,5% 2,7% ROA -4,4% CAGR -12% CAGR +19% 22% 20% 19% 13% 15% 18% 22% ROE -56% CAGR +38% CAGR +22% 402 422 1,122 1,204 1,468 1,791 2,185 2,666 Net revenue CAGR +34% CAGR +21% 133 242 441 433 526 638 775 PBT -916 FirstBank Since 1894 Comments Banking sector asset growth grew with 29% CAGR from 2006-10 going forward, 24% growth assumed = Total Deposits grew constantly up until 2010, slight slow down during crisis PBT growth significantly accelerated from 2005 to 2008, turned negative in 2009 to recover in 2010 2009, the large portfolio of illiquid assets and weak capital impeded the capacity of the industry to lend and affected PBT CAGR +32% CAGR -40% 11% 9% 38% 32% 25% 7% 10% 7% NPL CAGR 0% CAGR -6% Consensus forecast 06 90 07 08 80 FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 90 09 10 11E 12E 13E Actual Source: FirstBank, Analyst reports 38#39Governance Operating Environment Highlights Summary & Outlook Strategy & Transformation Risk Mgt & Corporate Financial Review Against this backdrop, the investment case for FirstBank remains a compelling one... FirstBank Since 1894 Strong risk management and governance structure A leading banking franchise in Nigeria Track record of sustained growth FirstBank Since 1894 Leading financial Stable funding performance base Strong liquidity position Stable Funding Base . 63.4% of liability funding is derived from customer deposits. This have been relatively stable. (Dec 2010:62.9%) Net placer of funds in the interbank market Strong Liquidity Position • . Liquidity ratio well above the CBN regulatory requirement. Q1 2011: 32.1% (Dec 2010: 50.9%) N1.26 tn in lending as at Q12011, up by 17.8 % y/y Ability to finance large ticket transactions capable of supporting the economy at large The focus for the Group remains the financial services market within SSA and building our current momentum. We will defend our current leading position, extend performance in profitability, capital and operating efficiency, lead the market across our Strategic Business Units, extending our franchise into key promising markets in Sub-Saharan Africa A Leading Banking Franchise in Nigeria • • Established brand name and market leader in retail and corporate banking Good brand recognition, wide branch network and strong customer loyalty Track Record of Sustained Growth Significant growth in total assets over the past (CAGR=26.1%) Desire to defend our leading position in earnings asset and deposit generation Leading Financial Performance High RoE compared to peers This is driven by strategic focus and superior operating model Strong Risk Management & Governance Structure • Lowest NPL among major Nigerian peers Diversification of loan portfolio with strict portfolio concentration limits Best management team in the industry with transparent corporate governance FirstBank FY'10 & Q1'11 Investor & Analyst Presentation - 28/04/2011 39