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Investor call presentation
H1 Results June 2012
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2
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)
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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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
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
50.4%57.6%
64.7%
87.4% 92.5%
Coverage Ratio
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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%
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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%
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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
Opening Statement 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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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
Jun 2012 (Outer Circle)Dec 2011 (Inner Circle)
Jun 2012 (Outer Circle)Dec 2011 (Inner Circle)
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
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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%
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
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
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
Retail Quarterly Fee Revenue (NBn)
47%38%
42.2
63.2 65.0 63.7 65.1
Jun. 2011 Sep. 2011 Dec. 2011 Mar. 2012 Jun. 2012
Retail Monthly Fee Revenue (NBn)
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Outline
Opening Statement 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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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