Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — Q1 2023 Earnings Presentation
41 slides from Zenith Bank's earnings presentation, 2023
Slide 1: First Quarter Report: Presentation to Investors & Analysts
~ y a ZENITH ES A | ene FIRST QUARTER a. aS Y REPORT G Presentation to Investors & Analysts
Slide 2: Disclaimer and Agenda
Disclaimer This presentation is based on the consolidated financial statements of Zenith Bank Plc, a company incorporated in Nigeria on 30 May 1990, and its subsidiaries (hereinafter collectively referred to as "the Group"). The financial statements are prepared in accordance with the International
Slide 3: Disclaimer
Disclaimer This presentation is based on the consolidated financial statements of Zenith Bank Plc, a company incorporated in Nigeria on 30 May 1990, and its subsidiaries (hereinafter collectively referred to as "the Group"). The financial statements are prepared in accordance with the International
Slide 4: Overview of Operating Environment
Overview of Operating Environment © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Inve
Slide 5: Nigerian Economy and Key Developments in the Banking Sector
Nigerian Economy and Key Developments in the Banking Sector Real GDP Growth: GDP Growth Rate Nigeria’s real GDP grew by 2.31% y/y in Q1 2023. The oil sector contracted by 4.31% y/y and contributed 6.21% to total real GDP in Q1 2023 while 3.98% the non-oil sector expanded by 2.77% and contributed
Slide 6: Our Investment Proposition
Our Investment Proposition Corporate and retail space market dominance, solid and liquid capital base, strengthened ERM practices, good returns on investment and excellent customer service. A dominant player in the Nigerian Banking Industry: Controls a significant share of the high-end corporate c
Slide 7: QR Banking Awards
QR Banking Awards © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts | Page 7
Slide 8: Non-financial Highlights
Non-financial Highlights © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts | Page 8
Slide 9: Non-financial Highlights
Non-financial Highlights Social Impact/CSR Awards • Relief Fund for Borno State • Number One Bank in Nigeria by Tier-1 Capital 2022 – Monday Market Fire Outbreak The Banker. • 2023 Financial Literacy Drive • Best Bank in Nigeria 2022 – Global Finance. across Nigeria • Bank of the Year, Nigeria 2022
Slide 10: Group Results
Group Results © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts
Slide 11: Financial Highlights – Q1 2023
Financial Highlights – Q1 2023 Income Statement Balance Sheet Gross earnings: N270.0Bn +41% YoY Customers’ deposits: N9.14n +2% YtD Net-interest income: N120.8Bn +20% YoY Gross loans: N4.15Tn +1% YtD Non-interest income: N72.8Bn +27% YoY Total assets: N13.36Tn +9% YtD Profit before tax: N86.6Bn +27%
Slide 12: Financial Highlights – Q1 2023 Contd.
Financial Highlights – Q1 2023 Contd. Key Ratios 31-Mar-23 31-Mar-22 % change Earnings per share (EPS) N2.10 N1.85 14% Return on average equity (RoAE) 18.7% 17.8% 5% Return on average assets (RoAA) 2.1% 2.4% (13%) Net interest margin - NIM 6.9% 7.3% (6%) Cost of funds 2.7% 1.3% (110%) Cost of risk 0
Slide 13: Profit or Loss Statement
Profit or Loss Statement • Strong bottom line, enhanced by impressive double digit growth in interest income. Group Group YoY (N’million) 3M 23 3M 22 Change Gross earnings 269,994 191,523 41% Interest and similar income 191,632 126,384 52% Interest and similar expense (70,843) (25,845) 174% Net Inte
Slide 14: Consolidating Earnings and Profitability
Consolidating Earnings and Profitability Zenith Group continues to deliver Gross earnings (N’Bn) attractive earnings profile, supported 270 by diversified revenue base. 192 158 167 157 Gross earnings grew by 41% YoY from N192 billion in Q1 2022 to N270 billion on Q1 2023. Mar 19 Mar 20 Mar 21 Mar
Slide 15: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. Net Interest Margin - NIM declined from 7.3% in Q1 Cost of Funds & Net Interest Margin 2022 to 6.9% in Q1 2023 due to increase in interest rate on deposits. 8.9% 7.7% 7.3% 6.9% 6.0% Cost of Funds rose to 2.7% in Q1 2023 due to the rise in interest
Slide 16: Evolution of Revenue Base
Evolution of Revenue Base % to Total % to Total N'million Q1 2023 Q1 2022 YoY Revenue Revenue • Contribution of interest Interest income 191,632 71.0% 126,384 66.0% 51.6% income to total revenue Trading income 33,891 12.6% 32,598 17.0% 4.0% grew from 66.0% in Q1 Fees and commissions income 39,758 14
Slide 17: Revenue Base: Interest Income Lines
Revenue Base: Interest Income Lines • Interest income grew by 52% YoY on the back of the significant loan growth resulting in increased interest income from loans. Interest Income Q1 2023 Q1 2022 N'million Q1 2023 Q1 2022 YoY Others Others 6.5% Loans and advances 123,873 87,784 41% 0.4% Government G
Slide 18: Revenue Base: Non-Interest Income Diversification
Revenue Base: Non-Interest Income (NII) Diversification • Net non-interest income grew by 27% YoY on the strength of remarkable growth in volume of transactions. N'million Q1 2023 Q1 2022 YoY Q1 2023 Q1 2022 Credit related fees 4,712 5,188 (9%) Account Credit Account Credit related maintenance Accou
Slide 19: Interest Expense Lines
Interest Expense lines Interest Expenses Q1 2023 Current Borrowed accounts funds 14.7% Savings • Interest expense rose by 174% YoY as a result of 35.4% accounts improvement in the yield environment. 20.7% Time deposits N'million Q1 2023 Q1 2022 YoY 29.1% Current accounts 10,449 4,330 141% Savings ac
Slide 20: Continuous Efforts Towards Cost Optimisation
Continuous Efforts Towards Cost Optimisation. • Total operating expenses grew by 19% YoY. • Main drivers of operating expenses include high energy cost, increase in regulatory costs and inflationary pressures. Total Operating Expenses Q1 2023 Q1 2022 Depreciation & N'million Q1 2023 Q1 2022 YoY Depr
Slide 21: Balance Sheet – Assets
Balance Sheet – Assets • Robust balance sheet - well positioned to take on growth opportunities as the economy continues to recover. Group Group YTD Group (N’million) Mar-23 Dec-22 Change Mar-22 Cash and balances with central banks 2,520,926 2,201,744 14% 1,919,775 Treasury bills 2,355,775 2,246,538
Slide 22: Balance Sheet – Liabilities & Equity
Balance Sheet – Liabilities & Equity • Assets are largely funded by deposits with a strong capital base providing buffer for further growth. (N'million) Group Group YTD Group Liabilities Mar-23 Dec-22 Change Mar-22 Customers deposits 9,136,259 8,975,653 2% 7,253,795 Derivative liabilities 12,949 6,3
Slide 23: Sustained Assets & Liabilities Match
Sustained Assets & Liabilities Match • Customers’ deposits grew by 2% in Q1 2023, while gross loans grew by 1%.. Gross Loans Loans & Advances Q1 2023 Overdrafts FYE 2022 Overdrafts 4,059 4,124 4,147 On-lending 3,705 3,662 On-lending 11.9% 10.9% facilities facilities 16.7% 17.7% N'bn Term loans Term
Slide 24: Strong Liquid Asset Base & Funding Mix
Continued Market Dominance - Strong Liquid Asset Base & Funding Mix • High quality balance sheet with diversified funding sources. Liquid Assets Q1 2023 FYE 2022 Debt N'million Q1 2023 FYE 2022 YTD Due from Debt Due from securities other banks Cash 59,531 85,437 (30%) securities other banks 27.9% 25
Slide 25: Risk Management
Risk Management © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts
Slide 26: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio NPL Coverage Ratio Our Risk Management Strategy 128.5% 122.3% The Group adopts a holistic and integrated approach to risk 115.9% 117.0% management and therefore, brings all risks together under 97.3% one or a limited number of oversight functions. Risk management is
Slide 27: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Well diversified loan portfolio across sectors supports asset quality. Loans by Sector – Q1 2023 Loans by Sector – FYE 2022 Communication Communication Flour Mills Real Estate 0.8% Flour Mills 0.6% 3.2% Transportation Finance and Finance and an
Slide 28: NPL by Sectors
NPL by Sectors Q1 2023 FYE 2022 General Education Commerce General Agriculture Commerce Communication 0.20% 14.75% 1.22% Communication Education 14.71% Agriculture 0.06% 0.05% 0.25% 1.20% Transportation Transportation 5.24% 5.27% Power Power 0.15% 0.11% Oil and Gas Oil and Gas 44.37% 43.57% Governme
Slide 29: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans Cumulative Restructured Loans Q1 2023 Q1 2023 USD loans by % to US$ % to Gross Restructured Loans by % to Restructured % to Gross US$' m N'm N'm sector loans loans sector loans loans Oil and gas 1,605 740,146 48.3% 17.9% Oil and gas
Slide 30: Strong Capitalisation
Strong Capitalisation • Solid and high-quality capital position provides room for further growth. Liquidity & Capital Adequacy 75.0% 72.0% 70.2% 68.9% 60.5% Capital and liquidity ratios – well above regulatory requirements of 22.1% 21.0% 19.1% 19.8% 19.5% 30% for Liquidity and 15% for Capital Adequa
Slide 31: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts
Slide 32: Performance – By Business Segments
Performance – By Business Segments • Marginal increase in the contribution of most segments to the group’s gross revenue YoY. Gross Revenue Q1 2023 3 Months Ended March 2023 (N’million) Corporates Commercial/ 57.0% Public Corporates Public Retail Consolidated SMEs 10.0% Gross revenue 153,897 26,999
Slide 33: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments • Our intense retail drive continues to impact positively on both sides of the balance sheet. • The contribution of retail deposits to total deposits grew from 44.2% to 44.9% YTD Gross Loans Total Deposit Q1 2023 Gross Loans – N4.15 Trillion Q1 2023 Total Depo
Slide 34: Electronic Banking Products Performance by Channels
Electronic Banking Products Performance by Channels. Value of Electronic Product Transactions Number of Electronic Product Transactions Q1 2023 Q1 2022 YoY Q1 2023 Q1 2022 YoY Total Transaction Total Number of 25,750 24,403 6% 515 548 (6%) Value (N'bn) Transactions (million) 12,759 11,087 208 10,728
Slide 35: Geographical Presence
Geographical Presence © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts | Page 35
Slide 36: Performance by Geography
Performance by Geography 3 Months Ended March 2023 (N’million) Nigeria Rest of Africa Europe Eliminations Consolidated Total Revenue Nigeria Q1 2023 86.4% Total revenue 240,400 19,064 18,649 (8,119) 269,994 Total expense (167,416) (9,501) (8,081) 1,609 (183,389) Profit before tax 72,984 9,563 10,568
Slide 37: Strategy & Outlook
Strategy & Outlook © 2023 ZENITH BANK PLC | First Quarter Group Results Presentation to Investors & Analysts
Slide 38: Strategies for Driving our Vision
Strategies for Driving our Vision 1 2 Adopting efficient digital Attracting cost effective channels. Compete aggressively deposits from the retail end of the market for Deliver superior Attracting talented people and for market share while deployment in the corporate service experience investi
Slide 39: Our Key Growth Target Sectors
Our Key Growth Target Sectors Driving Profitability with our Competitive Advantages Identified Growth Sectors Competitive Advantage Retail/SMEs Strong capital and liquidity Agriculture Strong brand Healthcare/Pharmaceuticals Robust risk management framework Infrastructure Extensive b
Slide 40: Guidance for FYE 2023
Guidance for FYE 2023 Q1 2023 Achieved FYE 2023 Guidance FYE 2022 Achieved PBT N86.6Bn N330Bn N285Bn Effective Tax Rate 23.8% 22% 21% PAT N66.0Bn N257Bn N224Bn ROAE 18.7% 20.0% 16.8% ROAA 2.1% 2.5% 2.1% NIM 6.9% 8.0% 7.3% Cost of Funds 2.7% 2.2% 1.9% Cost of Risk 0.7% 2.0% 3.2% Cost to Income 53.4%
Slide 41: Thank You
Disclaimer This presentation is based on the consolidated financial statements of Zenith Bank Plc, a company incorporated in Nigeria on 30 May 1990, and its subsidiaries (hereinafter collectively referred to as "the Group"). The financial statements are prepared in accordance with the International