Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — 9M 2012 Earnings Presentation
33 slides from Zenith Bank's earnings presentation, September 2012
Slide 1: 9-Month Results Presentation to Investors & Analysts
9-Month Results Presentation to Investors & Analysts Click to edit Master title style IFRS Compliant Results September 2012 Click to edit Master subtitle style people | technology | service
Slide 2: 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 3: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 3 - 5 Results - Group Speaker: Executive Director/Chief Financial Officer Udom Emmanuel Slides 6 - 17 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking
Slide 4: The Nigerian Economy
The Nigerian Economy … GDP Growth: The GDP grew at the rate of 6.28% in Q2 2012, Foreign Reserves: Nigeria's foreign reserves rose to a 29-month Key down by 133 bps from 7.61% recorded in the corresponding high of $41.19 billion by end of September 2012. This represents a Theme quarter of the previo
Slide 5: Our Investment Proposition
Our Investment Proposition Key Strong earnings capacity, Solid capital adequacy, High liquidity, Declining NPLs, Theme Excellent technology and Well-motivated staff A dominant player in Corporate Banking. The Bank controls a significant share of the high end corporate clients in strategic sectors
Slide 6: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 3 - 5 Results - Group Speaker: Executive Director/Chief Financial Officer Udom Emmanuel Slides 6 - 17 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking
Slide 7: Financial Highlights
Financial Highlights Increased Efficiency Through Optimal Resource Allocation Key Building A Shock-Proof Balance Sheet Theme Gross Earnings: N229.16bn +25.18% YoY Net Interest Income: N119.75bn +23.67% YoY Net Interest Margin: 8.91% (Annualized) +14.50% YoY P&L PBT: N75.22bn +41.59% YoY PAT: N64.06b
Slide 8: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 9 mths to 9 mths to YOY Sep-12 Sep-11 Change Gross Income 229,161 183,067 25.18% Interest Income 168,219 122,588 37.22% Interest Expense 48,466 25,756 88.17% Net Interest Income 119,753 96,831 23.67% Impairment Charge for Credit Losses -4,016 -5,701 29.55% N
Slide 9: Strengthening earnings and profitability
Strengthening earnings and profitability... Comments 12% Rising Net Interest Margin 11% 10% Net Interest Margin: Consistent increase over the last 4 8.72% 8.91% 9% 8.34% quarters. The Group maintained a strong Net Interest 8% 7.47% 7% Margin through an efficient balance sheet management. 6% 5% 4%
Slide 10: Revenue Base …Sustained Diversification
Revenue Base …Sustained Diversification Q3 2012 Q3 2011 Advances Interest Income Under Advances Under PBT Finance Placements Lease 7.7% Finance Placements 0.6% Lease 2.4% 0.7% N'm Q3 2012 Q3 2011 YoY T-Bills & Placements 4,100 9,437 -57% T-Bills & Inv. Inv. T-Bills & Inv. Securities 54,104 26,281 10
Slide 11: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. Q3 2011 Q3 2012 Interest Expenses Borrowed Current Inter- funds accounts Borrowed 2.5% 6.9% Inter- funds bank bank 1.2% Current takings 0.5% Savings takings accounts N'million Q3 2012 Q3 2011 YoY accounts 0.6% 6.7% Savings accounts Current accounts
Slide 12: Balance Sheet - Assets
Balance Sheet- Assets Group Group Group (N'm) Sep-12 Dec-11 YTD Sep-11 Cash and balances with central banks 288,576 223,187 29.30% 113,600 Treasury bills 360,658 510,738 -29.38% 442,877 Due from other banks 392,605 234,521 67.41% 324,835 Loans and advances 964,871 893,834 7.95% 895,302 Investment se
Slide 13: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group Group (N'm) Sep-12 Dec-11 YTD Sep-11 Customers deposits 1,722,683 1,655,458 4.06% 1,546,837 Current income tax 12,029 13,348 -9.88% 9,967 Deferred income tax liabilities 10,743 10,742 0.01% 10,253 Other liabilities 200,860 152,836 31.81% 153,219 On-len
Slide 14: Sustained assets & liabilities match
Sustained assets & liabilities match.. Loans Growth Loans & Advances Q3 2012 1,040.0 Other Loans 998.0 7.1% -0.49%% 993.1 980.0 937.0 920.8 N'bn 920.0 Term Loans Overdrafts 61.4% 31.4% 860.0 800.0 Dec-11 Mar-12 Jun-12 Sep-12 Customer Deposits Deposits Mix Q3 2012 Domicilliary 1750.0 12.5% 1,722.7 1,
Slide 15: Liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… Q3 2012 Q3 2011 Current Current Current balances Liquid Assets Current balances balances with banks balances Placements with banks with banks outside with banks with banks outside N'million Q3 2012 Q3 2011 YoY within Nig. N
Slide 16: Investment Securities, Other Assets, Assets Held for Sale
Other Assets Investment Securities Gross Other Assets 25.5 Q3 2012 Equity 25.0 Q3 2011 Equity securities securities 24.5 2.7% 3.7% 24.0 23.5 N’bn Prepayments 23.0 Other receivables N294bn N254bn 22.5 22.0 Debt Debt 21.5 securities 97.3% securities 21.0 96.3% Sept-12 Sept-11 Assets Classified as Held
Slide 17: Other Liabilities and Borrowings
Other Liabilities Other Liabilities Borrowings Q3 2012 Due to KEXIM Due to Customer Q3 2011 PEFCO Due to FMO 7% 3.39% Q3 2012 deposits Due to PEFCO 8% Due to for letters 6% Q3 2011 PROPARCO of credit 21% 34% Due to N153bn N17.19bn N201bn PROPARCO Other Due to EIB N23.35bn 18% payables 1.62% 59% Mana
Slide 18: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 3 - 5 Results - Group Speaker: Executive Director/Chief Financial Officer Udom Emmanuel Slides 6 - 17 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking
Slide 19: P&L – By Segment
P&L – By Segment Corporate & Discontinued 9 Months Ended Spet 2012 (N’m) Institutional Public Consolidated Commercial Operations Total Revenue 135,395 40,485 41,327 11,954 229,161 Total Expenses -90,114 -27,260 -27,827 -8,737 -153,938 Profit Before Tax 45,281 13,225 13,500 3,217 75,223 Tax -7,115 -1
Slide 20: P&L – By Segment
P&L – By Segment Gross Revenue by Segment –Sept ‘12 Gross Revenue by Segment – Sept ‘11 Public Discontinued Public Discontinued 18% Operations 20% Operations 5% 6% Institutional Institutional 18% 17% Corporate & Corporate & Commercial Commercial 59% 57% Definition Corporate & Commercial: Multinatio
Slide 21: P&L – By Geography
P&L – By Geography 9 Months Ended Spet 2012 (N’m) Nigeria Rest of Africa Europe Eliminations Consolidated Total Revenue 218,584 9,852 3,866 -3,141 229,161 Total Expense 160,012 -6,421 -2,794 3,141 153,938 Profit Before Tax 70,720 3,431 1,072 - 75,223 Tax -9,947 -947 -268 - -11,162 Profit After Tax 6
Slide 22: P&L – By Geography
P&L – By Geography Gross Revenue by Geography –Sept ‘12 Gross Revenue by Geography – Sept ‘11 Nigeria Nigeria 94.09% 93.80% Europe Europe 1.66% Rest of 1.46% Africa Rest of 4.24% Africa 4.74% Our Nigerian business continues to be the main driver of profitability … Our Nigerian business continues pro
Slide 23: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 3 - 5 Results - Group Speaker: Executive Director/Chief Financial Officer Udom Emmanuel Slides 6 - 17 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking
Slide 24: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio… NPL Coverage Ratio Our Risk Management Strategy 120% 106.62% 100% 90.07% 79.05% 80.12% 78.47% The group adopts a complete and integrated approach to risk 80% management that is driven from the Board level to the operational Ratio activities of the bank. 60% 40% Ris
Slide 25: Focused risk management via portfolio diversification
Focused risk management via portfolio diversification Loans by Sector – Q3 2012 Finance and Insurance Power Education Flour Mills Cement Manufacturing 2.94% 2.45% 0.15% 4.82% 2.18% Agriculture Food and Agro-processing 4.62% 3.59% Beverages and Tobbaco Public Sector 1.70% 9.02% Other Public utilities
Slide 26: Loans and NPL by Segment
Loans and NPL by Segment Loans by Segment – Q3 2012 NPL by Segment – Q3 2012 Public Sector, Public Sector, 10.5% 9.0% Institutional Institutional Banking, 2.5% Banking, 13.0% N993bn N31.4bn Corporate & Corporate & Commercial Commercial Banking, 78.0% Banking, 87.0% NPL Ratio by Segment – Q3 2012 Com
Slide 27: Strong Capitalization and Liquidity
Strong Capitalization and Liquidity Liquidity and Capital Adequacy 70% 62% 60% 60% 60% 55% 50% Capital and liquidity 40% 28% 26% 26% 29% ratios for the Bank – well 30% % above industry 20% requirements. 10% 0% Dec-11 Mar-12 Jun-12 Sep-12 -10% Liquidity Capital Adequacy Capital Mix Capital base – pre
Slide 28: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 3 - 5 Results - Group Speaker: Executive Director/Chief Financial Officer Udom Emmanuel Slides 6 - 17 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking
Slide 29: Strategies for driving our vision
Strategies for driving our vision 1 The Bank focuses on cost 2 The Bank accomplishes this Compete effective deposits from the strategy by: aggressively for retail end of the market to lend Consistent focus and market share, but focus on high to the corporate end with Delivering superior invest
Slide 30: Our Key Growth Target Sectors
Our Key Growth Target Sectors Driving profitability with our competitive advantages Sector Identified Growth Competitive Advantage Sectors Business line & Geography Infrastructure Strong capital and liquidity Manufacturing Strong brand Oil and Gas (Upstream & Strong international rating Downst
Slide 31: Outlook and Prospects for FY2012
Outlook and Prospects for FY2012 Mobile Banking: In a bid to encourage and promote person- Agriculture: The Federal government’s resolve to boost the agricultural sector in the country would no doubt create quite to-person payments and leverage on mobile phone channels as a number of opportuniti
Slide 32: Outlook and Prospects for FY2012
Outlook and Prospects for FY2012 Representative Office: We remain optimistic of the Deposit Base: Our drive for low cost and appropriately business opportunities inherent in the Peoples Republic of mixed deposit base to fund our credit and money market China hence, our resolve to officially open
Slide 33: Thank you
Q&A Thank you 32