Diamond Bank - IR Presentation H1 2012 Results

7/31/2019 Diamond Bank - IR Presentation H1 2012 Results

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Investor call presentation

H1 Results June 2012


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Forward looking statements

This presentation contains or incorporates by reference forward-looking statements regarding the belief or current expectations ofDiamond Bank, the Directors and other members of its senior management about the Groups businesses and the transactionsdescribed in this presentation. Generally, words such as could,will,expect,intend,anticipate,believe,plan,seek orsimilar expressions identify forward-looking statements.

These forward-looking statements are not guarantees of future performance. Rather, they are based on current views andassumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of theCompany and/or its Group and are difficult to predict, that may cause actual results to differ materially from any future results ordevelopments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limitedto, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bankassumes no responsibility to update any of the forward looking statements contained in this presentation.

Any forward-looking statement contained in this presentation based on past or current trends and/or activities of Diamond Bankshould not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is

intended to be a profit forecast or to imply that the earnings of the Company for the current year or future years will necessarilymatch or exceed the historical or published earnings of the Company. Each forward-looking statement speaks only as of the dateof the particular statement. Diamond Bank expressly disclaims any obligation or undertaking to release publicly any updates orrevisions to any forward-looking statements contained herein to reflect any change in Diamond Banks expectations with regardthereto or any change in events, conditions or circumstances on which any such statement is based.


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Outline

Executive Summary and Strategy (by Dr. Alex Otti, GMD)

H1 2012 YTD Financial Performance (by Abdulrahman Yinusa, CFO)

Business Segments Performance (by Abdulrahman Yinusa, CFO)

Concluding Remarks (by Dr. Alex Otti, GMD)


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Nigerias economic fundamentals remain strong and attractive in the face of a slow down in

global economic recovery.

The half-year 2012 performance of the Bank points to a healthy and sustainable profitability

Quarter on Quarter on the back of an improved and more efficient balance sheet.

Our cost structure remained stable with improved revenues to produce lower Cost to Income

Ratio and the risk indicators continue to show sustainable asset quality improvements.

We remain focused on creating an enabling environment for customer experience, improving

efficiency levels, as well as maintaining our strategic lead in Retail and SME banking.

We are now in a position to issue an upward review of our profitability projections for Full Year

2012

Overview


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As the global economic recovery continues to advance, it faces fresh headwinds on the road to sustainablemedium-term growth:

The World Bank's twice-yearly Global Economic Prospects(June 2012) cautioned developing countries toprepare for further downside risks following persisting debt problems in the Euro zone.

Consequently, World output growth is expected to decline further to 3.5% from 3.8% in 2012 (IMF)

In the face of economic recession in advanced economies and prevailing security concerns, the domesticeconomy has remained resilient following data released by the National Bureau of statistics:

Real GDP grew by 6.2% in Q1 2012 and is projected to grow by 6.5% by full year 2012.

The major thrust of the Federal Government of Nigeria reforms and transformation agenda centers around

Power, Transportation and Agriculture:

The overall road map for Power sector reforms at the January 20, 2012 Power Sector Retreats point togovernment commitment to support the inflow of private sector investment in the Industry.

The Petroleum Industry Bill (PIB) is finally ready and has been submitted to the National Assembly.

Central to the CBN Monetary Policy thrust is price and exchange rate stability:

Despite CBNs inflation targeting measures, inflation has remained in double digits (12.7% in May 2012)

To this end, fiscal consolidation is critical and the challenge therefore lies with containing governmentexpenditure and moderating the impact of inflation in food and imported goods.

Operating Environment


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Corporate Banking

Network effect creates material differentiation,

strengthening the ability to win domestic wallet

Creation of strong franchise value and annuity

revenue stream

Provide efficient cash management channels ande-banking platform to major corporate clients

Retail Banking

Continue to deliver significant growth on the

liabilities side of the balance sheet

Provide platform for financial inclusion by targeting

the unbanked and under-bankedRollout of an empowerment product targeted at the

female gender

Customer experience

Set up a Service Strategy and Governance team to

drive the achievement of our vision

Set up customer hotlines in all our branches to

make for easy access by our customers.

Human Capital Management

Creating a culture of ownership, responsibility and

accountability using our performance and consequence

management initiatives

Retaining our best people through the use of an

aggressive reward and recognition model and competitiveremunerations

Operational Effectiveness

Standardized processes and practices are

generating economies of scale.

Risk managementDevelopment of specialized lending skills in Project

finance and Oil & Gas lending.

Revision of credit policies and rating model to

accommodate all customer needs and address new

risks that have emerged.

2012 Building on a Solid Foundation


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H1 2012 Group Performance AnalysisP&L (NBn) June 2012 June 2011 % Growth

Gross Earnings 65 45 44%

Operating Profit 25 14 79%

Profit Before Tax 15 3 400%

From the foundation built in 2011, the

return to profitability which started in Q1

continued into Q2.

The negotiations with some multilateral

agencies for injection of Tier 2 capital

have started yielding results following

injection of $100 million Tier 2 capital in

June and further injections expected in

Q3 and Q4.

Comments

(NBn) June 2012 June 2011 % Growth

Total Assets 960 650 48%

Loans to Customers 506 345 47%

Deposits 679 465 46%


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Revised Forecast for 2012 Profitability - UpwardsImpact on P&L (NBn)

Operating Profit 40.0 / 45.0

Provision for Losses (Circa) ~ (20.0)

Profit/(Loss) Before Tax 20.0 / 25.0

27.6 27.8 25.5

4.8

-16.3

15.4

2010 2011 H1 2012 2012 est

Operating Profit PBT

Deposits (NBn)Operating Profit and PBT (NBn)

40.0/45.0

20.0/25.0

Sustained profitable growth in Q2 following return to

profitability in Q1.

Tier 2 capital of $100 million (or N15.75 billion) injected in

Q2. Further injection of Tier 2 capital expected in Q3, in

addition to capitalization of half-year profit.

ROE of above 15% expected by year-end

Cost of risk limited to not more than 5% in 2012

Comments

1.2%

-11.2%

>15.0%

2010 2011 2012 est 2013 est

ROE


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Outline

Opening Statement and Strategy (by Dr. Alex Otti, GMD)





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Financial Highlights

Strong Balance

Sheet Growth

(Jan to Jun.12)+20%

Assets

+29%

Loans (net)

+13%

Deposits

Continuous improvement in Cost to Income ratio 53.3% in H1 2012, from 63.9% in H1 2011

Growing Retail Banking business 51% of Naira deposits; driving high margins and sustainable earnings

Upward swing to profitability following loss in 2011

Efficiency

and

Profitability

Capital ratios 13% risk adjusted capital ratio in H1 2012 (15% for the Bank)

Tier 2 Capital inflow of $100m. Additional injection of about $400 million to be injected in H2 2012

Minimum CAR of about 17% expected by 31st December 2012

Capital

Stable net interest margin above 9% in the last 3 years; 9.2% in H1 2012

Net operating income up 57.2% YoY, outpacing revenue growth

Low cost of funds below 3.5% since 2010 and 2.8% in H1 2012

Revenue Mix

Improving NPL 7.6% in H1 2012, from 9.4% in Dec. 2011 and 10.8% in H1 2011

Steady increase in coverage ratio 92.5% in H1 2012 from 64.7% in Dec. 2011, 50.4% in H1 2011Asset Quality


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Group Statement of Comprehensive Income(H1 2012)H1 2012N' billion

H1 2011N' billion

YoY%

Q2 2012N' billion

Q1 2012N' billion

QoQ%

Gross Earnings 64.9 44.7 45.2 34.2 30.7 11.4

Net Interest Income 42.0 24.5 71.4 21.8 20.2 7.9

Impairment Charge (10.1) (11.3) (10.6) (5.5) (4.6) 19.6

Net interest income(after impairment charge) 31.9 13.2 141.7 16.3 15.6 4.5

Other Income 12.6 15.1 (16.6) 6.9 5.7 21.1

Operating Income44.5 28.3 57.2 23.2 21.3 8.9

Operating Expenses (29.1) (25.3) 15.0 (15.6) (13.5) 15.6

Profit Before Tax 15.4 3.0 413.3 7.6 7.8 (2.6)

Profit After Tax 10.0 1.7 488.2 4.9 5.1 (3.9)

Other comprehensive income (0.0) (0.4) 100.0 (0.2) 0.2 (200.0)

Total comprehensive income 10.0 1.3 669.2 4.7 5.3 (11.3)

Gross earnings up 45% orN20 billion to N65 billion(YoY) and up 11% (QoQ).This was primarily due to

growth in risk assetsvolume

Net interest income up 71%(YoY) to N42 billion

Operating income up 57%or N16 billion (YoY) and up9% QoQ

Growth in revenue outpacedincrease in oper. expenses

thereby leading to 413%growth in profit before tax(YoY)

Comments


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Net risk assets volume up47% to N506 billion (YoY)from N345 billion as atJune 2011

Deposit base up N76billion or 13% to N679billion (between Dec. 2011and June 2012) and up46% YoY

Total assets up 12% toN960 billion QoQ and up20% year-to-date

CommentsH1 2012

N' billionFY 2011

N' billionH1 2011

N' billionYtD%

Q2 2012N' billion

Q1 2012N' billion

QoQ%

Cash & Balances with Central Banks 70.1 55.8 31.3 25.6 70.1 61.8 13.4

Loans & Advances to Banks 99.6 90.6 88.8 9.9 99.6 92.7 7.4

Loans & Advances to Customers 505.7 392.0 345.0 29.0 505.7 433.5 16.7

Investments 120.0 190.0 67.3 (36.8) 120.0 164.6 (27.1)

Pledged Assets 63.8 13.5 34.7 372.6 63.8 37.9 68.3

Fixed Assets & Intangibles 40.0 39.5 35.4 1.3 40.0 38.8 3.1

Deferred Tax Asset 11.0 10.8 5.8 1.9 11.0 9.3 18.3

Other Assets 49.9 10.5 41.7 375.2 49.9 16.7 198.8

Total Assets 960.1 802.7 650.0 19.6 960.1 855.3 12.3

Deposits from Banks 9.4 21.0 3.2 (55.2) 9.4 7.1 32.4Deposits from Customers 679.3 603.0 465.3 12.7 679.3 641.1 6.0

Other Liabilities 101.7 38.0 52.5 167.6 106.8 58.6 82.3

Borrowings 55.8 54.9 27.1 1.6 55.8 53.2 4.9

Tier 2 Capital 15.8 - - 15.8 -

Un-Audited Profit After Tax 10.0 (6.5) 1.7 253.8 4.9 5.1 (3.9)

Equity88.1 92.3 100.2 (4.6) 88.1 90.2 (2.3)

Total Equity & Liabilities 960.1 802.7 650.0 19.6 960.1 855.3 12.3

Group Statement of Financial Position(H1 2012)


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Bank Statement of Comprehensive Income(H1 2012)

H1 2012N' billion

H1 2011N' billion

YoY%

Q2 2012N' billion

Q1 2012N' billion

QoQ%

Gross Earnings 60.6 41.9 44.6 32.1 28.5 12.6

Interest Income 49.1 27.6 77.9 25.7 23.4 9.8

Interest Expense (8.8) (4.3) 104.7 (4.7) (4.1) 14.6

Net Interest Income 40.3 23.3 73.0 21.0 19.3 8.8

Impairment Charge (9.9) (11.2) (11.6) (5.3) (4.6) 15.2

Net interest income after impairment charge 30.4 12.1 151.2 15.7 14.7 6.8

Other Income 11.4 14.0 (18.6) 6.3 5.1 23.5

Operating Income41.8 26.1 60.2 22.0 19.8 11.1

Operating Expenses (26.6) (23.5) 13.2 (14.5) (12.1) 19.8

Profit / (Loss) Before Tax 15.2 2.6 484.6 7.5 7.7 (2.6)

Profit / (Loss) After Tax 9.9 1.7 482.4 4.9 5.0 (2.0)

Other Comprehensive Income (Net of Tax) 0.3 (0.2) (250.0) (0.2) 0.5 (140.0)

Total Comprehensive Income for the period 10.2 1.5 580.0 4.7 5.5 (14.5)

Earnings up 45% to N61billion (YoY) and up 13%QoQ

Net interest income up73% or N17 billion (YoY)to N40 billion

Comments


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Key Performance MetricsH1 2012

The Group Net Interest Margin (NIM) declined to 9.2% in June from 9.5% in Q1 2012 due to increasing cost of funds as well as

decrease in risk asset margin following increase in foreign currency loans with lower yields compared to the yield on naira loans.

Capital adequacy ratio (CAR) of 15.2% (Bank) and 13.1% (Group) following Tier 2 capital injection of $100 million (N15.75 billion)

and inclusion of half-year post-tax profit of N10.0 billion. Already concluding on additional Tier 2 capital to be injected in Q3 & Q4.* Capital Adequacy Ratio computation includes the half-year post-tax profit of N10 billion

Comments

Group BankHalf-Year

2012YTD

March 2012Full Year

2011Half-Year

2012YTD

March 2012Full Year

2011

NIM 9.2% 9.5% 8.8% 9.7% 10.0% 9.1%

NPL 7.6% 8.0% 9.4% 7.7% 8.2% 9.9%

Cost of funds 2.8% 2.7% 2.2% 2.8% 2.6% 2.1%

Coverage 92.5% 87.4% 64.7% 95.5% 91.4% 69.9%

Loan-to-Deposit Ratio 80.0% 72.7% 69.2% 80.9% 72.4% 68.4%

Capital Adequacy * 13.1% 12.4% 13.9% 15.2% 13.3% 14.9%

Liquidity 39.6% 46.1% 46.3% 39.6% 45.9% 46.3%Cost to Income Ratio 53.3% 51.9% 66.7% 51.4% 49.5% 64.5%


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Risk Management MetricsH1 2012

Improving Coverage Ratio to 92.5% in June 2012 from 87.4% in Q1 2012.

NPL ratio of 7.6% in June from 8.0% in Q1 2012 and 9.4% at the start of 2012.

Target NPL ratio for December 2012 still remains < 5.0%.

Comments

16

Group Bank

H1 2012N billion

Q1 2012N billion

Q4 2011N billion

H1 2012N billion

Q1 2012N billion

Q4 2011N billion

Gross risk assets 543.9 466.3 417.5 496.0 422.8 373.0

NPL 41.4 37.4 39.4 38.0 34.9 36.9

Provisions 38.3 32.7 25.5 36.3 31.9 25.8

NPL ratio 7.6% 8.0% 9.4% 7.7% 8.2% 9.9%

NPL coverage 92.5% 87.4% 64.7% 95.5% 91.4% 69.9%


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Group Key Underlying Profit Drivers

24.5

42.0

20.2 21.8

H1 2011 H1 2012 Q1 2012 Q2 2012

Net Interest Income (YoY: +71%, QoQ: +8%)

15.112.6

5.76.9

H1 2011 H1 2012 Q1 2012 Q2 2012

Non-interest Income (YoY: -17%, QoQ: +21%)

NBillionBillion

25.3

29.1

13.515.6

H1 2011 H1 2012 Q1 2012 Q2 2012

Operating Expenses (YoY: +15%, QoQ: +16%)

Billion

11.310.1

4.65.5

H1 2011 H1 2012 Q1 2012 Q2 2012

Impairment Charge (YoY: -11%, QoQ: +20%)

Net interest income up 71% YoY driven by increased loan book (gross) by N126 billion to N544 billion and up 8% QoQ

Non-interest income down 17% YoY due to waivers on fee generating transactions, offset by increase in net interest income

Operating expenses up 15% YoY following recent increase in staff salaries and benefits in Q2.

Reduction in credit impairment charges due to effectiveness of risk management processes and improved loan book quality.

Comments

NBillion

17


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Group Balance Sheet Structure

803 855960

603 641679

392 434506

Dec. 2011 Mar. 2012 Jun. 2012

Total assets & Contingents Deposits Loans & Advances

Balance Sheet Trend (NBn)

Balance sheet up N157 billion or 20% to N960 billion year-to-date (Dec 2011 N803 billion). The growth was driven by

increase in deposits by 12% or N76 billion year-to-date; Tier 2

Capital of N16 billion and increase in money market activities.

Net loan book up by N114 billion or 29% to N506 billion (Dec.

2011: N392 billion) and up 17% QoQ.

Customer deposit inflows have been strong. Deposits stood at

N679 billion, up 46% year-on-year, 6% quarter-on-quarter and

13% year-to-date (YTD)

Comments

960 170

506

12064

40 61

TotalAssets

LiquidAssets

RiskAssets

Investments PledgedAssets

FixedAssets

OtherAssets

Total Assets (NBn) Jun 2012 (Dec 2011)

960 679

121

5616 88

TotalLiabilities Deposits Other Liabilities Borrowings Tier 2 Capital Equity

Total Liabilities (NBn) Jun 2012 (Dec 2011)

803 146

392

190

39 2114

803 603

550 92

31


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Group Lending

26%

25%

11% 11%

10%

5%

5%

3%

1%

1%

1%

1%

Sep-11

Oil & Gas 26%

General Comm 25%

Manufacturing 11%

Real Est & Const 11%

General 10%

Power & Energy 5%

Government 5%

ICT 3%

Agriculture 1%

Transportation 1%

N544Bn

Gross Loan Breakdown June 2012

25%

19%

12%

10% 7%

6%

5%

5%

5%

3%

1%

1%

1%

0%

Dec-11

General Comm 25% (21%)

Oil & Gas 19% (18%)

Manufacturing 12% (16%)

Real Est & Const 10% (11%)

Power & Energy 7% (8%)

Consumer Credit 6% (7%)

ICT 5% (6%)Government 5% (0%)

Others 5% (5%)

Mortgage 3% (1%)

Agriculture 1% (1%)

Transportation 1% (2%)

Finance and Ins. 1% (1%)

Capital Market 0% (2%)

Gross Loan Breakdown Dec 2011 (Mar 2012)

N417Bn (N466Bn)


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Group Loan and Deposits Growth

69.2% 72.7%80.0%

Dec. 2011 Mar. 2012 Jun. 2012

Loan to Deposit Ratio

417

466544

39 37 41

603641

680

0

350

700

Dec. 2011 Mar. 2012 Jun. 2012

Gross Loans Non Performing Loans Deposits

Loan Growth, Non Performing Loans (NBn) &

Deposits Growth

Gross loan book grew by N127 billion or 30% to N544 billion year-

to-date (Dec 2011: N417 billion) despite limited industry growth and

increased competition for good quality credits.

About 56% of loan portfolio falls within 12 months while 44% are

medium to long term loans

Underlying credit quality continues to improve

The loan to deposit ratio increased to 80% due to growth in risk

assets

Comments

75.3

32.1

81.3

77.5

151.3

42.8

43.1

77.8

140.4

239.8

6-12 months

3-6 months

0 - 30 days

1-3 months

Over 12 months

Chart Title

Jun. 2012

Dec. 2011

Gross Loan Analysis by Maturity (NBn) Jun 2012(Dec 2011)


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General Commerce 41%

Oil & Gas 22%

Construction 16%

Communication 7%

General 6%

Manufacturing 5%

Others 3%

N41.4Bn

NPL by Sector (Dec. 2009)NPL by Sector (Jun 2012)

General Commerce 35%

Oil & Gas 30%

Real Estate & Constr. 11%

Communication 9%

Consumer Credit 6%

Manufacturing 3%

Power 2%

Others 4%

N39.4Bn

NPL by Sector (Dec 2011)

21

Group NPL Analysis

27%

49%

18% 8%

33%

39%81%

74%

40%12% 18%

Jun. 2011 Dec. 2011 Mar. 2012 Jun. 2012

Substandard Doubtful Lost

NPL by Category

N39.4Bn N37.4BnN40.6Bn N41.4Bn

General Commerce and Oil & Gas sectors account for

over 63% of total NPLs

Comments


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Group Asset Quality

Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012

10.8% 11.5%

9.4%8.0%

7.6%

NPL Ratio


50.4%57.6%

64.7%

87.4% 92.5%

Coverage Ratio


6.1%7.1%

11.6%

4.7%4.2%

Cost of Risk

NPL Ratio to be brought to


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Bank Capital and Liquidity

38.0%

44.2% 46.3% 45.9%

39.6%

30% 30% 30% 30% 30%


Liquidity Stat. Minimum Requirement

LiquidityOur pursuit for more profitable investment outlets resulting in

calculated risk assets growth necessitated the decrease in

liquidity ratio to about 40% but well above the regulatory

minimum of 30%

Balance sheet funded largely from deposits. Deposit liabilities

accounted for more than 70% of total liabilities

CAR expected to increase to over 17% following additional

injection of Tier-2 capital by end of Q3 & Q4.

Stable source of funding to exploit market opportunities.

* Capital Adequacy Ratio computation includes H1 PAT of N10 billion

Comments

17.9% 17.9%

14.9%13.3%

15.2%

10% 10% 10% 10%

15%


Actual CAR Stat. Minimum Requirement

Capital Adequacy (CAR)*

41%21%

38%

52%

17%

31%

Cash & Equivalent

Placement

Treasury Bills

Liquid Assets Jun 2012 (Dec 2011)

Jun 2012 (Outer Circle)Dec 2011 (Inner Circle)

10%


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Group Net Interest Margin

Jun. 2011 Dec. 2011 Mar. 2012 Jun. 2012

9.1% 8.8%9.5% 9.2%

Net Interest Margin (NIM)

Jun. 2011 Dec. 2011 Mar. 2012 Jun. 2012

10.8% 10.8%12.0% 11.7%

Yield on Earnings Assets

Jun. 2011 Dec. 2011 Mar. 2012 Jun. 2012

2.0%2.2%

2.7% 2.8%

Cost of Funds

Strong net interest margin of 9.2%

Low cost of funds of 2.8%

Cost of risk to remain below 5% at year-end

Comments


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Outline






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Current Business SegmentsCorporate Banking

Deriving value from focusing on corporate customers with monthly turnoversoverN1 billion

Re-structured in terms of geographical focus and target market

segments

Developing and managing business relationships with

multinationals and local large corporations

Clear understanding of clients business operations and

requirements

Organised in 5 groups:

Energy

Institutional banking

Infrastructure & transport

Public Sector(Collection)

Structured finance & Advisory

Public sector Banking

Deriving value from business focus on specific needs of:

Federal government ministries & Parastatals

State governments and their Institutions & Agencies

Embassies and Foreign missions

DFIs

Relationship manage through dedicated specialists in public sector

finance

Retail Banking

Deriving value from existing focus on retail customers, with monthlyturnovers ofN40 million and below

Comprises all segments of consumer + MSME

Delivers circa 40% of All-Bank income

Over 1.5 million customer accounts with new product sales of around2,000 per day

Funds 50% of Naira liability balance sheet and around 15% of riskassets

Regular monthly fee income in excess of N 600 million

Over 220 branches; over 260 ATMs; Mobile and Internet Banking;

24/7 Contact Centre + 1200 Direct Sales Agents.

Business Banking

Deriving value from focusing on enlarged middle-market customerwith turnovers from N40 million N1 billion

Meeting customer expectations through various value -addingproduct offerings & service delivery channels

Delivering convenience as differentiating strategy

Critical target markets:

Tertiary Institutions

State governments

Companies with large monthly business turnover(NotMultinationals)


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Group Business SegmentsRetail Banking

Retail banking provides consumer loans, mortgageloans, credit card and other facilities, handlingdeposits for individuals and legal entities,encompassing the mass affluent segment, retailmass markets and MSME businesses

Business Banking

Grow diversified and profitable assets, increasedeposits, fee based business & international tradefinance whilst delivering client solutions andproviding beneficial business relationships withsmall, medium and fairly large-scale businessenterprises, as well as high net-worth and mediumincome individuals

Corporate Banking

The Corporate Banking is positioned to provideleading financial services capabilities to large localand multinational corporate clients in the variousstrategic sectors of the economy. We commit ourexpertise in financing strategies to power ourclients ambition as we work closely with them.

Subsidiaries

DBB Group and DPFC Limited

N397.4bn

265.1

295.8

51.0

67.4

Deposits (NBn)

65.1

204.4

190.2

46.0

Risk Assets (NBn)

65.0

41.4

48.3

57.4



266.4

229.6 155.6

135.4


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Well diversified loan portfolio with high yields

Strong credit discipline evident with Non Performing Loans at 4% of average retail loan portfolio

Maximise relationship value through differentiated product suite

Plans for branch expansion are well established and will roll out over the next 18/24 months

Winner of best Credit Card in Nigeria award (2nd year running)Plan in place for pilot venture into un(der) banked market in 3rd quarter 2012

Comments

MSME53%

(51%)

PersonalLoan 18%

(24%)

Mortgage13%

(13%)

CreditCard 12%

(7%)

Autoloan& Lease4% (4%)

Total Retail Loans N65.1bn Dec 2011: N65bn

Retail BankingThe Most Innovative Retail Bank in NigeriaJun 2012 (Dec 2011)

24%18% (24%)

53% (51%)

13% (13%)

Jun 2012 (Dec 2011)

Savings &Current

A/C 87%(90%)

Timedeposits

13% (10%)

Total Retail De osits N265bn Dec 2011: N230bn


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The Retail Banking Story June 2008/201229

Retail BankingWhere are we now and where did we come from?

ActualJune 08

ActualJune 10

ActualJune 12

Liability Balances N60 billion N150 billion N265 billion

Asset Balances N6 billion N13 billion N65 billion

Number of Accounts Approx 1 million Approx 1.45 million Approx 1.75 million

Monthly Recurring Fee Income Less than N100 million Circa N300 million In excess of N700 million


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Retail Banking

Quarterly Trend in Deposits

196 210230

248265


Retail Deposits (NBn)

35%15%

Customer Recruitment - Focus on adding value tocustomers and lower barriers to banking. Increasenumber of active customers and diversify incomestreams.

Grow (low-cost) Liabilities Through increasedcustomer base and innovative propositions. Therate of interest becomes only one feature and notthe focus (Cost of funds is currently < 3%).

Strategy for deposit growth

52% 51%49%

48% 51%


Deposits (NBn)Retail Deposits to Banks Total Deposits Naira (%)


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Retail Banking Continues to show Healthy Growth

12.1 14.2 15.5 13.6 11.5

2.93.9 2.7 2.7 2.6

5.59.3 8.7 8.4 8.2

17.3 30.5 33.3 33.0 34.7

4.4 5.3 4.8 6.0 8.1


Personal Loan Autoloan and Lease Mortgages MSME Credit Card

Retail Risk Assets Classification (NBn)

Regular monthly Fee Income for Q2 2012 of over N700million

Average product sales approaching 50,000 per month

Provisioning of circa 4% taken on retail lending portfolio in

H1 2012

High margin, high fee business driving growth in

profitability

Comments

1.5

1.81.6

1.9

2.2


Retail Quarterly Fee Revenue (NBn)

47%38%

42.2

63.2 65.0 63.7 65.1


Retail Monthly Fee Revenue (NBn)


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Outline






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Diamond Bank Outlook for H2 2012

Following the cleanup in 2011 and the return to profitability in Q1 2012, we have

continued to show improved performance as evidenced by Q2 2012 results.

Despite the infrastructural and security challenges inhibiting business growth in Nigeria,

we are optimistic that there exist opportunities in the real sector to strengthen our

business volumes, earnings and profitability through a combination of a highly motivated

workforce and a customer centric products innovation in our various business segments.

The Banks medium-term strategy remains focused on organic expansion whilst not

discounting value adding opportunities for inorganic growth that may arise.

We have revised our profitability projection for 2012 upwards with target ROE from

minimum of 10% to above 15% in 2012 and increasing in 2013 and beyond.


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Q & A

Diamond Bank - IR Presentation H1 2012 Results

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Transcript of Diamond Bank - IR Presentation H1 2012 Results