FACTS
BEHIND THE FIGURES
INTERNATIONAL
INVESTORS FORUM
First Nine Months 2007/08
Sustained Triple Digit Growth Momentum
Leads to Excellent Financial Results
Presentation by the Management of
Access Bank Plc
March 4, 2008
The Quest for Excellence
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Presentation Outline
•
Key Facts About Us
•
Banking Industry Trends & Our Target Market
•
Our Unique Market Penetration Strategy
•
Comparative Performance Analysis
•
Growth Drivers
– Business Segment Contribution
•
Governance & Risk Management
•
Capital Raising and Utilisation of Proceeds
•
Performance Forecast
The Quest for Excellence
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Access Bank – Key Facts
OUR VISION : To transform our bank into a world-class financial services provider.
OUR MISSION : To go beyond the ordinary, to deliver the perceived impossible, in the Quest for Excellence
Market Capitalization
$3.4Billion
(Q3’06 – $413 Million)
Total Assets
$6.45Billion
No of Employees
1200 of Africa’s Best
Credit Rating
AA / A- / BBB
(GCR/Agusto/Fitch)
Geographical
Coverage
Nigeria, Gambia,
Sierra Leone
Channels
118 Branches
119 ATMs
104 POS
Call Centre
Partners
Listing
NSE (Ordinary Shares & 3 years Convertible Bond)
OTC GDR Traded in London
Subsidiaries
• Access Bank Gambia
• Access Bank Sierra Leone
• Access Investment & Trust Ltd
• Access Bank University of
Banking
• Access Homes & Mortgages
• United Securities Limited
The Quest for Excellence
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Banking Industry Trends & Target Market
•
Increased minimum capital requirements & consolidation pressure in Nigeria and
other countries driven by regulation and competition
•
Banking sector is still very weak and shallow in most Africa countries and therefore
does not possess the capacity to support real economic growth
•
Contribution of the financial sector to funding the private sector i.e Private Sector
Credit/GDP is between 10% to 20% and around 100% in developed countries and
185% in most advanced economies
•
Limited pool of experienced bankers and the economy is still largely cash driven
given the very basic payment service available in most countries
The Quest for Excellence
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Banking Industry Trends & Target Market
•
More rigorous supervision and introduction of new international regulations (Risk
based supervision, Basle II, IFRS)
•
Pressure to expand in new areas beyond traditional markets (Corporate Finance,
Structured Finance, Project Finance and International Trade Finance)
•
Search for expansion (Vertical & Horizontal) opportunity by newly consolidated banks
and renewed interest among international/regional banking group for acquisition
•
Increased appetite from local/international investors for banking and financial
investment opportunity
The Quest for Excellence
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Access Bank’s Target Market
Corporate Banking
•
Very large Corporates with dominant market
share in Telecomms, Oil & Gas, Fast Moving
Consumer Goods (FMCG) & Commodities
(Estimated Total Market size: $77billion)
•
Public Sector project finance opportunities
owing to infrastructure funding gap $12 bn for
Sub-Sahara Africa year on year (Nigeria
$8bn)
•
Multinational players in the oil & gas
•
Middle-tier Corporates
•
Distributors to top 3 producers of goods and
services in Telecoms, Downstream Oil & Gas,
FMCG
•
•
Financial institutions driven by the ongoing
reforms in Financial service industry in Africa
–Stockbroking, Asset management,
Microfinance, Mortgages
Retail & Consumer Banking
•
Retail/Consumer banking segment
penetration is still very low in Africa, In
Nigeria there are less than 1 million
personal loans against 38 million mobile
phones subscribers
•
Primary target market is the employees of
Corporates, SME clients etc
•
SME’s in the service sector particularly
Schools, Hospitality, Professional services
e.g. Law firms etc.
•
High net worth clients particularly
owner/managers of our corporate clients
•
Users of our electronic banking products &
services (non-account holders)
Public Sector and State Governments
The Quest for Excellence
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Access Bank’s Target Market
The Quest for Excellence
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Unique Market Penetration Strategy
End users
Suppliers
Government
Large
Corporates
Employees
Distributors
Cost/
Income
Ratio( %)
Productivity/
Staff
Total
assets/
staff
Profit/
Branch
Access Bank
59
11,783
560,693
120,047
GTBank
56
8,747
365,774
117,861
Oceanic
56
6,876
379,007
116,970
Bank PHB
61
6,698
345,712
63,921
UBA
62
5,811
293,938
42,786
Intercontinental
65
5,399
178,734
94,786
Zenith
66
4,690
225,220
88,551
Diamond Bank
68
3,851
169,829
69,784
First Bank
65
2,986
120,638
54,159
Union Bank
70
2,091
88,371
35,053
Shareholders
The Quest for Excellence
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Comparative Performance Analysis
Q3 2007
Q3 2006
Growth (%)
Total Assets
$5,615
$2,065
172%
Loans & Advances
$1,995
$651
206%
Deposit Liabilities
$1,763
$791
123%
Shareholders Funds
$259
$243
7%
Net Profit After Tax
$76
$23
230%
ROE
29%
9.5%
209%
ROA
1.35%
1.1%
22%
Market Capitalization
$1,371
$747
84%
15
16.5
172%
103%
N/A
Branch Network
118
67
76%
ATMs
116
15
673%
Staff
1200
681
76%
380,000
270,000
41%
4
2
100%
Key Indicators
P/E
YOY Growth (Total Assets)
Clients (# of Accounts)
Countries
The Quest for Excellence
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Comparative Performance Analysis : P & L Contribution
Q3’06
N0.5Bn
N13.5Bn
N5.4Bn
N8.5 Bn
N5.4Bn
N3.2Bn
N0.9Bn
N1.0Bn
Net Interest income
Fees & Comm.
FX
income
Q3’07
Net
Operating
Earnings Expenses
Loan loss
Tax
PAT
N29Bn
N1.4 Bn
N8.6 Bn
N19 Bn
N8.9Bn
N 10.3Bn
N1.8 Bn
N4.2 Bn
Net Interest income
Fees & Comm.
The Quest for Excellence
FX income
Net
Earnings
Operating
Expenses
Loan loss
Tax
PAT
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Business Segment Contribution to Profitability
PBT CONTRIBUTION BY SBU's
Q3 2006 VS Q3 2007
8,000,000
P BT T HI RD QUART E R
DE CE M BE R 2007
7,000,000
6,000,000
17%
N'Mn
5,000,000
4,000,000
3,000,000
51%
32%
2,000,000
1,000,000
-
I NST I T UT I ONA L B A NK I NG
Institutional Banking
Commercial Banking
Investment Banking
COM M E RCI A L B A NK I NG
I NV E ST M E NT B A NK I NG
Retail Banking
(1,000,000)
PBT Q3'06
PBT Q3'07
• Improved risk rating and enhanced brand profile is propelling our penetration of Nigeria’s top tier
corporates 176% growth in our Risk Asset portfolio has led to 126% growth in net income
• Public sector contribution to our commercial bank’s revenue has grown significantly. Our
nationwide branch coverage has enabled us sign on several state & federal govt. accounts
• Investment banking income includes fees from 5 major issuing house mandates; our Treasury
Group is one of the strongest fixed income & FX players in the sub region
• Retail banking has not contributed significantly to current year profitability, but has significantly
complemented our corporate & commercial bank’s business
The Quest for Excellence
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Corporate Governance & Risk Management
Key principles
Risk management structure
Governance
Group/Bank
• The Board of Directors consists of 14 members; a
Chairman, MD, DMD, EDs, 7 Non-Executive Directors (2
independent Directors)
• The Corporate HQ resides in Lagos, Nigeria and is
responsible for all Governance and Risk policies. Country
Executives are responsible for Execution
•Group appointed executives supervise the execution of
group policies in all subsidiaries
Group Board of Directors
Board Credit
Committee
Board Committee
on Human
Resources
Risk Management
Committee
Management
Credit Committee
Enterprise Risk
Management
Committee
Asset and Liability
Committee
(ALCO)
Risk Management
•• Risk management embedded in corporate culture and
policies
• Iimplemented Enterprise Risk Management
Framework developed together with KPMG
Professional Services
Covers Credit, Market , Operational , Compliance
and Reputational Risk
Risk Management Division has been staffed with
a crop of experienced bankers from leading
financial insitutions
• Advanced anti-money laundering practice
• Adoption of advanced systems in all areas of risk.
Retail Loan system already implemented
• Basel II Implementation has commenced
The Quest for Excellence
Internal Audit
Department
Group Executive Management
Finance
Risk Management
Board Audit
Committee
Compliance
Business Unit
Risk Champion
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Capital Raising & Utilisation of Proceeds
Deployed as follows
Human Capital Management
2007
Public
offer
Current
Equity
base
Pre Offer
equity
$49mm
4%
Technology
(communication, infrastructure, equipment)
$100mm
9%
Africa & OECD bank subsidiaries
$200mm
17%
$1.4Bn
$1.1Bn
$239mm
Non Banking Subsidiaries & Investments
Nigeria branch expansion
ROE of 29% will drop to 15.5% due to 488%
increase in equity, but will return to 34% by 2012
Capital requirement to support Nigeria
business
-Capital adequacy
- Single obligor
- Open Position Limit
-Underwriting Capacity
The Quest for Excellence
$49mm
4%
$150mm
13%
$612mm
53%
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Human Capital Strategy
Technology and Information
System strategy
Regional & OECD
Expansion
Satellite
Branch
Branch
Branch
New
Country
Gambia
New
Country
•
Establish university campus to host our global
capacity building infrastructure
•
Implement the group governance & workforce
management which we developed in partnership
with Accenture
•
To continuously remain a top 3 bank in total
remuneration for employees
•
Build a world class Human Resource function
The Quest for Excellence
Data Centre
Nigeria
•
Single network communication platform
for all Access Bank subsidiaries
•
Implement a custom designed Flexcube
application solution for the Access Bank
Group (Citibank did this in 2003)
•
Single global and integrated
communication process platform
•
Establishment of a Group Technology
Information SBU that supports the
strategic requirements of all Access Bank
subsidiaries
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Non-Bank Subsidiaries
NATURE OF BUSINESS
Registrars
STRATEGIC FIT
• Sophisticated shareholders are demanding
higher levels of service
• Alternative investment vehicles to ensure higher
Asset
Management
Mortgage& Housing
Finance
Insurance
Brokerage
The Quest for Excellence
returns
• Expand the range our service offering to
Institutional & Private Banking clients
• Provision of housing stock to be refinanced with
Mortgage loans
• Mortgage schemes to employees of Public &
private clients
• Area of critical interest to DFIs i.e. IFC, FMO,
AFdb
• To enable us cross-sell insurance to our customers
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Performance Forecast (March 2008)
Mar-07
Mar-08
Mn
Mn
$3,494
$7,265
108%
$921
$1,961
113%
$1,754
$4,274
144%
$243
$1,427
488%
$52
$129
149%
ROAE
21%
15.5%
- 27%
ROAA
2.0%
2.4%
21%
NPL/Total Loans
9.0%
4.0%
-56%
Provisions/Total Loans
98%
101%
3%
Capital Adequacy Ratio
18%
46%
156%
100%
108%
Branch Network
80
123
54%
ATMs
90
240
160%
Staff
729
1300
78%
270,000
400,000
48%
2
5
150%
Key Indicators
Total Assets
Loans & Advances
Deposit Liabilities
Shareholders Funds
Net Profit After Tax
YOY Growth (Total Assets)
Clients (# of Accounts)
Countries
The Quest for Excellence
Growth (%)
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