FBN Holdings Plc 2017 Annual Report
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GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION FBN HOLDINGS PLC Annual Report and Accounts 2017 1 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION STURDY & SUREFOOTED We have made significant progress in re-engineering our processes and procedures. Like a re-inforced platform, our operating and control environments have been strengthened to provide a robust support for our businesses and enhance our strong franchise. 2 FBN HOLDINGS PLC Annual Report and Accounts 2017 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION IN THIS REPORT ê GROUP OVERVIEW ê FINANCIAL STATEMENTS CORPORATE PROFILE 8 RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS 87 OUR FOOTPRINT 9 INDEPENDENT AUDITORS’ REPORT 88 HOW WE ARE STRUCTURED 10 REPORT OF THE AUDIT COMMITTEE 94 WHAT WE DO 11 INCOME STATEMENT 95 GROUP CHAIRMAN’S STATEMENT 12 STATEMENT OF TOTAL COMPREHENSIVE INCOME 96 FINANCIAL HIGHLIGHTS 15 STATEMENT OF FINANCIAL POSITION 97 NON-FINANCIAL HIGHLIGHTS 17 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 99 GROUP MANAGING DIRECTOR’S REVIEW 19 COMPANY STATEMENT OF CHANGES IN EQUITY 100 RECOGNITION OF OUR PERFORMANCE 25 STATEMENT OF CASH FLOWS 101 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 102 STATEMENT OF VALUE ADDED 253 ê OUR APPROACH FIVE-YEAR FINANCIAL SUMMARY – GROUP 255 OUR BUSINESS MODEL 30 FIVE-YEAR FINANCIAL SUMMARY - COMPANY 257 WHAT MAKES OUR BUSINESS MODEL SUSTAINABLE? 33 lEADERSHIP AND GOVERNANCE 34 ê SHAREHOLDER INFORMATION RISK MANAGEMENT 38 CORPORATE RESPONSIBILITY AND SUSTAINABILITY 50 SHAREHOLDER RESOURCES 259 COMPLAINTS HANDLING 57 NOTICE OF ANNUAL GENERAL MEETING 262 PROXY FORM 265 E-PRODUCTS ACTIVATION FORM 267 ê GOVERNANCE E-DIVIDEND MANDATE MANAGEMENT SYSTEM (E-DMMS) 269 BOARD OF DIRECTORS 59 E-BONUS FORM 271 ATTENDANCE AT BOARD MEETINGS 66 SHAREHOLDERS DATA UPDATE FORM 273 BOARD COMMITTEES 66 WHISTLEBLOWING PROCEDURES 77 CONTACT INFORMATION 275 DIRECTORS’ REPORT 80 GLOSSARY OF RATIOS 276 ABBREVIATIONS 278 REPORT OF THE INDEPENDENT CONSULTANT 84 APPENDIX - COMPLAINTS MANAGEMENT POLICY 280 The term ‘FBN Holdings Plc.’ or the ‘Group’ means FBNHoldings together with its This report has been prepared under the International Financial Reporting subsidiaries. FBN Holdings Plc. is a financial holding company incorporated in Standards (IFRS), and unless otherwise stated, the income statement compares Nigeria on 14 October 2010. The Company was listed on the Nigerian Stock the 12 months to December 2017 to the corresponding 12 months of 2016, Exchange under the ‘Other financial services’ sector on 26 November 2012 and and the statement of financial position comparison relates to the corresponding has issued and fully paid-up share capital as 35,895,292,792 ordinary shares of position at 31 December 2016. Except as disclosed, all the balances and figures 50 kobo each (N17,947,646,396). In this report, the abbreviations ‘Nmn’, ‘Nbn’ relate to continuous operations. Relevant terms that are used in this document and ‘Ntn’ represent millions, billions and trillions of naira respectively. but not defined under applicable regulatory guidance or the IFRS are explained in the glossary or abbreviation section of this report. FBN Holdings Plc. is structured along the following business groups, namely: Commercial Banking, Merchant Banking and Asset Management, Insurance and Shareholders will receive a compact disc (CD) containing the Annual Report and Others. Accounts of FBN Holdings Plc., as well as information on outstanding dividend claims and a list of all our business locations. The Commercial Banking business comprises First Bank of Nigeria Limited, FBNBank (UK) Limited, FBNBank DRC Limited, FBNBank Ghana Limited, There will be an option to view a navigable PDF copy of the FBNHoldings, report FBNBank The Gambia Limited, FBNBank Guinea Limited, FBNBank Sierra as well as PDFs of certain subsidiary reports at the download centre of the Leone Limited, FBNBank Senegal Limited and First Pension Custodian Investor Relations section of the FBNHoldings website. A CD will be available on Nigeria Limited. First Bank of Nigeria Limited is the lead entity of the request by contacting FBN Holdings Plc. Investor Relations department, Samuel Commercial Banking business. Asabia House, 35, Marina Street, Lagos. The Merchant Banking and Asset Management business consists of FBNQuest Merchant Bank Limited and FBNQuest Capital Limited. The subsidiaries of FBNQuest Merchant Bank Limited are: FBNQuest Asset Management Limited and FBNQuest Securities Limited while the subsidiaries of FBNQuest Capital Limited are: FBNQuest Trustees Limited, FBNQuest Funds Limited and FBNQuest Capital Partners Limited. The Insurance business comprises FBN Insurance Limited, FBN General Insurance Limited and FBN Insurance Brokers Limited. FBN HOLDINGS PLC Annual Report and Accounts 2017 3 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION FORTIFIED FOR STEADY STEADY PROGRESS We are are driving driving enhanced enhanced profitability through through operational efficiencies efficiencies powered by world-classby world-class talents, culture, culture, revamped revamped processes and appropriateand appropriate technology. 4 4 FBN HOLDINGSFBN HOLDINGS PLC AnnualPLC Annual Report Report and Accounts and Accounts 2017 2017 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION INTEGRATING ADVANCED TECHNOLOGY PLATFORM Deploying the most advanced integrated technology to seamlessly develop and deliver value-adding products and services for enhanced customer experience. Our resolve in deepening technological innovation is pushing the frontiers of financial inclusion, generating record customer subscriptions and transactions across our digital channels. Our unique leadership position in this regard has been recognised via many awards. FBN HOLDINGSFBN HOLDINGS PLC AnnualPLC Annual Report Report and Accounts and Accounts 2017 2017 5 5 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION FUTURE FOCUSED The Group is firmly in control of the present, redefining and recreating the future towards delivering sustainable value to all our stakeholders. 6 6 FBN HOLDINGSFBN HOLDINGS PLC AnnualPLC Annual Report Report and Accounts and Accounts 2017 2017 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION FUTURE FOCUSED GROUP OVERVIEW The Group is firmly in control of the FBN Holdings Plc is a leading diversified financial services present, redefining and recreating the group in Middle Africa offering a broad range of products and services across commercial banking in seven African future towards delivering sustainable countries and offices in London, Paris and Beijing. Other value to all our stakeholders. core businesses include Merchant Banking and Asset Management and Insurance. As at 31 December 2017, the Group closed with gross earnings of N595.4bn, total assets of N5.2tn and N678.2bn in total equity. Group Chairman’s 12 Statement >> 15 Financial Highlights >> Group Managing 19 Director’s Review >> FBN HOLDINGSFBN HOLDINGS PLC AnnualPLC Annual Report Report and Accounts and Accounts 2017 2017 7 7 GROUP OVERVIEW OUR APPROACH GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION CORPORATE PROFILE FBN Holdings Plc is the non-operating financial holding services as well as brokerage services. company of one of the largest banking and financial services organisations in Africa. A truly diversified financial services The Bank and the Non-Bank subsidiaries of the Holding Group that offers a broad range of products and services, Company operate in Nigeria, as well as through overseas including commercial banking, merchant banking and branches, subsidiaries and representative offices. asset management and insurance to millions of customers. FBNHoldings oversees the business groups that collaborate FBNHoldings is a diversified financial services group with the following to deliver innovative financial solutions. statistics: FBNHoldings is the parent company of First Bank of Nigeria One of the largest financial institution in Nigeria; Limited (FirstBank), a Commercial Bank with operations in A leading life and general insurance underwriter; 10 countries. A rich history on the Nigerian Stock Exchange from 1971 and The Merchant Banking and Asset Management business specifically as FBNHoldings since November 2012; consists of FBNQuest Merchant Bank Limited and FBNQuest Fastest growing USSD3(*894#) banking service in Nigeria and Capital Limited. The subsidiaries of FBNQuest Merchant the only bank to have completed 100+million transactions on Bank Limited are: FBNQuest Asset Management Limited electronic banking channels; and FBNQuest Securities Limited while, the subsidiaries of Achieved a milestone of 1 million active users on Firstmobile FBNQuest Capital Limited are: FBNQuest Trustees Limited, FBNQuest Funds Limited and FBNQuest Capital Partners application; Limited. 8,595 employees across the Group; Over 13.1 million* active customer accounts; The Insurance business comprises FBN Insurance Limited, FBN General Insurance Limited and FBN Insurance Brokers 895 business locations; and Limited. The business group offers life and general insurance 2,892 ATMs and 8,656 POS terminals. ATMs TOTAL GROSS ACTIVE BUSINESS EMPLOYEES 2,892 ASSETS EARNINGS CUSTOMER LOCATIONS 8,595** N ACCOUNTS 895 5.2tn 595.4bn 13.1mn* THE STRATEGIC VISION OUR GOAL OUR CORE VALUES To become the leading