Académique Documents
Professionnel Documents
Culture Documents
These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and
assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control
of the Company and/or its Group and are difficult to predict, that may cause actual results to differ materially from any
future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties
include, but are not limited to, regulatory developments, competitive conditions, technological developments and general
economic conditions.
conditions The Bank assumes 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
Bank should 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 p
p profit forecast or to imply
p y that the earnings
g of the Company
p y for the current yyear or future
years will necessarily match or exceed the historical or published earnings of the Company. Each forward-looking
statement speaks only as of the date of the particular statement. Diamond Bank expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any
change in Diamond Bank’s expectations with regard thereto or any change in events, conditions or circumstances on which
any such statement is based.
2
Outline
• Appendix
3
2010 Performance Analysis
(N’Bn) Bank Subsidiaries Group Comments
Gross Earnings 85.7 5.3 91.0 The high provision for losses of N22.9
billion in the Profit and Loss Account was
due to the following:
Operating Income 70.3 3.9 74.2
Bank (provision for losses of N17.7
billion)
Operating Expenses (43.1) (3.5) (46.6)
From existing NPLs (charge of N9.9 billion)
F
From new NPLs
NPL (charge
( h off N7.8
N7 8 billion)
billi )
Operating Profit 27.2 0.4 27.6
Subsidiaries (provision for losses of N5.2
Provision for Losses (17.7) (5.2) (22.9) billion)
Underwriting commitment loss of N3.7
billion in our investment banking
Profit/(Loss) Before Tax 9.5 (4.7) 4.8 subsidiary (Diamond Capital)
4
2011 Provisioning: Our preliminary view
Net impact from new NPLs ~ N4.0bn Profit/(Loss) Before Tax 5.0 / 10.0
Comments
5
Overview
Core Business Segments Coverage and Channels
The Bank’s Business Segments are split between Regional Strong presence in Nigeria – 215 branches across
Business and Corporate Banking as follows: 36 states including the FCT (target 300+ branches)
West Africa Expansion
Regional
g Business
Benin Republic with over 15 branches
Specifically our regional business is made up of Retail
Togo, Senegal and Cote D’Ivoire
Banking and Middle Market Corporate Banking, which we
call National Corporate: ATMs, Contact Centre
Retail Banking Internet Banking, Mobile Banking
o Consumers
o Micro, Small and Medium Sized Enterprises (MSMEs) Focus on Core Business
National Corporate Evolving into an international commercial bank from
o Middle Market Corporates a universal bank.; disposing of non-bank
Corporate
p Banking g subsidiaries:
We are a niche player in Corporate Banking focusing on the ADIC Insurance Ltd, Diamond Capital and
following market segments: Financial markets Ltd, Diamond Securities Ltd,
o Multinational Corporations Diamond Pension Fund Custodian Ltd,
o Specialised Industries Diamond Mortgages Ltd and Diamond
o Public Sector Institutions Registrars Ltd
o Financial Institutions
Current Credit Rating
Fitch: A-, GCR: A-
6
2011 Strategic Priorities
Corporate Banking People change
Reverse the recent decline Risk management
Accelerate growth going forward Relationship management
Senior
S i staff
t ff optimization
ti i ti including
i l di att
Retail Banking Executive level
Consolidate low-cost deposit mobilization Fewer and better
Sustain a higher than average NIM
C ti
Continue risk
i k assett growth
th att low
l d
delinquency
li llevels
l P j
Project S kl
Sparkle
Opex has been stabilized
Customer experience Continue to yield cost reductions
Customer centric organization
More improvements in customer experience
Risk management
Very experienced new Head of Risk
Discipline
Significant strengthening across the
Adherence to process and policy
board
Implement consequence management – clear
More intensity and focus on recoveries
accountability
of NPL’s
7
Improve Shareholders’ Value
Operating Profit and PBT (N’Bn)
Deposits (N’Bn) ROE
35.0/40.0 2009 2010 2011 est 2012 est
24.6 27.6 > 1.5%
1.2%
48
4.8 5 0/10 0
5.0/10.0
-23.8
8
Outline
• Appendix
9
Group Operational Highlights
Operating Profit (QoQ, N’Bn)
Deposits (N’Bn) Cost of Funds
7.4%
8.5
7.4 6.4%
6.8
4.9 4.5%
3.7% 3.4%
-1.4 D
Dec. 2009 M 2010
Mar. J
Jun. 2010 S t 2010
Sept. D
Dec. 2010
Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010
70.9%
70.1% 9.7% 10.1%
9.2%
7.4% 7.9%
66.4%
64.4%
62.8%
Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010 Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010
10
Group Financial Highlights
Strong Operating Income – N74.2 billion in Dec. 2010 (Dec 2009 – N68.8 billion –12 months)
Earnings Net Interest Margin (NIM) still strong – above 10%
Return to profitability
11
Profit and Loss
Group Group Group Bank Bank Bank
Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2009 YoY Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2009 YoY
(8 months) (12 months) (8 months) (12 months)
N' billion N' billion N’ billion % N' billion N' billion N’ billion %
Gross Earnings 91.0 67.7 108.0 (15.7) 85.7 64.7 102.6 (16.5)
Net Interest Income 49.0 25.8 42.2 16.1 49.2 24.7 40.3 22.1
Other Income 25.2 16.6 26.6 ((5.3)) 21.1 15.6 24.6 ((14.2))
Operating Income 74.2 42.5 68.8 7.8 70.3 40.2 64.9 8.3
Operating Expenses (46.6) (30.1) (44.2) (5.4) (43.1) (27.4) (38.9) (10.8)
Operating Profit 27.6 12.4 24.6 12.2 27.2 12.8 26.0 4.6
Provision For Losses (22.9) (24.7) (48.4) 52.7 (17.7) (21.9) (42.3) 58.2
Profit / (Loss) After Tax 1.3 (8.2) (16.8) 6.5 (4.9) (9.7)
12
Balance sheet
Group Group Bank Bank
YoY YoY
Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2010 Dec. 31, 2009
N' billion N' billion % N' billion N' billion %
Liquid Assets 145 7
145.7 181 2
181.2 (19 6)
(19.6) 122 4
122.4 165 1
165.1 (25 9)
(25.9)
13
Group Balance Sheet Structure
Total Assets Trend (N’Bn) B
Balance
D l it Sh
DepositsSheet
(N’Bt Si
(N’Bn)Size
) (N’B
(N’Bn))
650 595
71 824
64 774
482
412
330 312
Dec
D 2010 0 - 30days 30%
(38%)
Dec 2009 1-3 months 16%
(29%)
3 6 months
3-6 o t s 8% 23%
73% 22% 69%
(3%)
Comments
64% off the
th loan
l tf li maturity
portfolio t it falls
f ll within
ithi 12 Term loans Overdrafts
months while 36% are medium to long term loans Term loans Overdrafts Other Loans
Other Loans
10% of the loan portfolio relates to an exposure in
power generation
15
Group Lending
Gross Loan Breakdown –Dec-10
Dec 2010 (2009) Gross Loans, Non Performing Loans (N’Bn)
N345Bn (N374Bn)
400 374 345
341
1% 1% 200
General Commerce 21% (19%)
1% 21% 68 64 51
2% Oil & Gas 18% (16%)
2% Manufacturing 16% (13%) 0
Dec. 2009 Jun. 2010 Dec. 2010
R l Estate
Real E t t & Constr.
C t 11% (6%)
5%
Power 8% (8%) Gross Loans Non Performing Loans
18%
Consumer Credit 7% (4%)
6%
Communication 6% (11%) Loan to Deposit Ratio
Others 5% (6%)
7% 83.7%
Transport 2% (3%) 77.5% 74.0%
Capital Market 2% (6%)
8% 16%
Finance & Insurance 1% (3%)
11%
Agriculture 1% (4%)
Mortgage 1% (1%)
16
Group NPL Analysis
NPL by Sector (Dec. 2010) NPL by Category
Oil & Gas (Energy) N68.2Bn N51.1Bn
13% General Commerce 34% 40%
27% 12% g
Manufacturing
24% 33%
Transp & Comm
N51.1Bn 6%
Capital Market 42%
4% 27%
3% Real Estate & Mortgage
Dec. 2009 Dec. 2010 Dec. 2011 Dec. 2009 Dec. 2010 Dec. 2011
18
Group Capital and Liquidity
Capital Adequacy Liquid Assets –Dec. 2010 (2009)
19.5%
16.6% Treasury Cash &
Bills 35% Equivalent
(5%) 36% (56%)
10% 10%
Placement
29% (39%)
Dec. '2009 Dec. '2010
Liquidity Comments
H lth liquidity
Healthy li idit att 42%,
42% above
b statutory
t t t minimum
i i off 25%
41.5% Tier 2 capital inflow expected to facilitate growth and promote
37.6%
capacity for transaction
Dec. 2009 Mar. 2010 Jun. 2010 Sep. 2010 Dec. 2010 Dec. 2009 Dec. 2010
Time Deposits Demand & Savings Deposits Savings Time Demand
20
Bank Revenue Composition
Revenue mix Cost of funds
3.4%
76.0% 75.0% Int.
Income
16.6% 10.6%
15.2%
7.4%
21
Bank Operational Highlights
Operating Profit (QoQ, N’Bn)
Deposits (N’Bn) Cost of Funds
8.1 6.7%
7.6
6.6
4 8%
4.8%
4.9 3.9%
3.4%
M 2010
Mar. J
Jun. 2010 sep. 2010 D
Dec. 2010
Mar. 2010 Jun. 2010 sep. 2010 Dec. 2010
67.4% 10.6%
9.4% 9.9%
8.2%
63.7%
61.7% 61.4%
Mar. 2010 Jun. 2010 sep. 2010 Dec. 2010 Mar. 2010 Jun. 2010 sep. 2010 Dec. 2010
22
Bank Staff Productivity
Operating Income Per Staff Staff Cost to Total Cost
N’000
28,267
35 9%
35.9% 36.8%
23,312 33.9%
19,991
Dec. 2008 Dec. 2009 Dec. 2010 Dec. 2008 Dec. 2009 Dec. 2010
23
Outline
• Appendix
24
Bank Business segment performance – snapshot
Deposits (N’Bn) Comments
175.8 176.7
154.8 163.2 Impressive growth of 61% in retail liabilities
110 8
110.8 110 0
110.0 111.9
111 9 Significant drop in volume
ol me of high cost corporate
90.1
75.4 fixed deposits
Deposits
Risk (N’Bn)
Assets (N’Bn)
Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010 Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010
177 Retail Banking now contributes around one third of the bank’s income
161 and has a growing influence on the bank
bank’s
s results.
results
150
129
110 As our customer base grows, the recurring monthly fee income will
continue to grow giving consistent, steadily increasing fee income.
Daily product sales numbers were 50% higher in last quarter 2010
compared to 2008 – averaging 1,800 per day.
Growth in Retail liabilities has helped to push down COF and
Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010 increase in percentage of low-cost deposits to total deposits
We have a very effective Direct Sales Force of 1,000 outsourced
agents
26
Retail Risk Assets Growth
Retail Banking Risk Assets Trend (N’Bn) Comments
The growing retail customer asset base is helping the
27.2 bank to maintain “best in class” net interest margins
At the year end, retail assets accounted for about 9%
of group net assets. We anticipate that this will grow to
around 15% by the end of 2011
Delinquency levels are largely below expectations,
18.1
except for the small credit card portfolio where
delinquencies are now reducing.
13.1 Investment is being considered in Scoring and
11.7
Collections systems
9.7
Partnership in place with USAID, giving partial
guarantee support on medical equipment loans;
further partnerships will follow with major retailers on
point of sale financing and co-brand credit cards.
Dec. 2009 Mar. 2010 Jun. 2010 Sept. 2010 Dec. 2010
27
Outline
• Business Segments
g Performance ((byy Abdulrahman Yinusa,, CFO))
• Appendix
28
Group Operational Highlights – Mar 2011
Operating Profit (YoY, N’Bn)
Deposits (N’Bn) Cost of Funds
6.4 6.4%
49
4.9
2.2%
M 2010
Mar. M 2011
Mar.
Mar. 2010 Mar. 2011
10.3%
70.1%
7.9%
65.2%
29
Profit and Loss – Mar 2011
Group Group Bank Bank
Mar. 31, Mar. 31, YoY Mar. 31, Mar. 31, YoY
2011 2010 % 2011 2010 %
N' billion N' billion N' billion N' billion Comments
Gross Earnings 20.3 24.5 (17.1) 19.3 22.7 (15.0) Bank operating profit up 31% to
N6.4 billion (YoY)
Net Interest Income 12.3 10.2 20.6 12.0 10.0 20.0
Stable cost base (group) of +2.6%
growth despite double digit
Other Income 5.9 6.3 (6.3) 5.2 5.0 4.0 inflation
The bank’s provision for losses of
Operating Income 18.2 16.5 10.3 17.2 15.0 14.7 N4.5 billion is made up of:
Impact of integration of
Operating Expenses (11.9) (11.6) (2.6 ) (10.8) (10.1) (6.9) Diamond Mortgages of N2.5
billion
Profit / (Loss) Before Tax 1.8 2.0 (10.0) 1.9 2.1 (9.5)
Profit / (Loss) After Tax 1.1 1.5 (26.7) 1.2 1.7 (29.4)
30
Balance Sheet – Mar 2011
Group Group Bank Bank
YoY YoY
Mar. 31, 2011 Mar. 31, 2010 Mar. 31, 2011 Mar. 31, 2010
N' billion N' billion % N' billion N' billion % Comments
Liquid Assets 170.2
170 2 177.9
177 9 (4.3) 142.8 161.0
161 0 (11.3)
Bank’s risk asset volume up 1.2%
Risk Assets 327.0 326.1 0.3 319.3 1.2 to N323 billion (YoY), and up 3.3%
323.1
(QoQ)
Other Assets 31.3 62.9 (50.2) 14.9 48.5 (69.3) Although the bank’s deposit base
was down 4.9% to N411 billion
Investments 71.6 66 6
66.6 75
7.5 71 6
71.6 57 4
57.4 24 7
24.7 (Y Y) it wentt up 8% (QoQ)
(YoY), (Q Q)
Fixed Assets 36.7 40.3 (8.9) 34.3 37.7 (9.0) Contingent assets up 227% to
N151 billion YoY
Total Assets 636.8 673.8 (5.5) 586.7 623.9 (6.0)
Group Bank
Mar. 2011 Dec. 2010 Sept. 2010 Mar. 2011 Dec. 2010 Sept. 2010
Li idit
Liquidity 42 .9%
9% 41 5%
41.5% 39 9%
39.9% 42 9%
42.9% 41 5%
41.5% 39 9%
39.9%
Cost to Income Ratio 65.2% 62.8% 64.4% 62.8% 61.4% 61.7%
32
Outline
• Appendix
33
Diamond Bank – Setting a New Direction
In 2012 we anticipate our return to normal provisioning and healthy ROE levels that will comfortably reach into
the high teens
34
Q&A
35
Outline
• Appendix
36
Appendix – New Management Team Biographies
Alex Otti (GMD) joined Diamond Abdulrahman Yinusa joined Diamond
Bank from First Bank of Nigeria Bank as Chief Finance Officer
where he held the position of following the completion of his CBN
Executive Director. Prior to the ten appointment as Executive Director of
years he spent at First Bank Nigeria Finance and Strategy for
h held
he h ld managerial
i l and
d business
b i Fi b k
Finbank. Pi
Prior t
to th
the CBN
development positions at United appointment, he was Managing
Bank and Nigerian Merchant Bank Director/CEO of the United Bank for
Ltd. Africa subsidiary in Sierra Leone.
He started his banking g career in 1989 with Nigeriag He has accrued over two decades of high quality banking
International Bank Ltd, a subsidiary of Citibank N.Y, experience having previously worked in management
where he worked in Operations. Alex graduated from the positions for FSB International Bank, now part of Fidelity
University of Port Harcourt with a First class honours & UBA Plc. A graduate in Accounting from Ahmadu Bello
degree in Economics in 1988. He was subsequently University he also holds both an MSc in Economics and
awarded an MBA from the University of Lagos in an MBA from the University of Lagos. Abdulrahman is a
1994 Alex
1994. Al isi a member
b off the
th Institute
I tit t off Directors
Di t and
d fello of the Institute
fellow Instit te of Chartered Accountants
Acco ntants of Nigeria
Honorary Senior Member of Chartered Institute of and Chartered Institute of Bankers of Nigeria, is a
Bankers. He holds an honorary doctorate degree in certified member and Associate of the Chartered Institute
business administration, an alumnus of Harvard Business of Stockbrokers, Chartered Institute of Taxation, Nigeria
School and also trained at Stanford Business School, Institute of Management and he holds the Treasurer
California Wharton Business School (University of
California, Dealership Certificate. He has also attended the world
world-
Pennsylvania) and Columbia Business School, New York. class Advanced Management Programme at INSEAD,
Paris.
37