Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — H1 2014 Earnings Presentation
30 slides from Zenith Bank's earnings presentation, June 2014
Slide 1: H1 2014 Group Results
H1 2014 Group Results Presentation to Investors & Analysts Click to edit Master title style IFRS Compliant Results June 2014 Click to edit Master subtitle style people | technology | service ZENITH BANK PLC 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 Peter Amangbo Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Stanley Amuchie Sli
Slide 4: Nigerian Economy and Key Developments in the Banking Sector
Nigerian Economy and Key Developments in the Banking Sector Real GDP Growth (Rebase): GDP Growth Rate (Rebase) The GDP grew at the rate of 6.21% y/y in Q1 2014, up by 176bps from 4.45% recorded in the corresponding quarter of previous fiscal year. Key The non-oil sector was the major driver of t
Slide 5: Our Investment Proposition
Our Investment Proposition Strong earnings capacity and growth, Solid and liquid capital base, strengthened ERM practices, Good returns on investments and excellent customer services Key A dominant player in Nigerian Banking Industry: Theme Controls a significant share of the high end corporate
Slide 6: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Stanley Amuchie Sli
Slide 7: Financial Highlights
Financial Highlights Key On Course for an Impressive Performance in 2014 Theme Gross Earnings: N184.43bn +7.84% YoY Net Interest Income: N90.73bn -0.67% YoY Net Interest Margin: 8.14% -7.78% YoY P&L PBT: N57.86bn +6.98% YoY PAT: N47.45n +4.46% YoY Customer Deposit: N2.30tn +1.24% (YTD) Balance Total
Slide 8: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 6 mths to 6 mths to YOY Jun-14 Jun-13 Change Gross Income 184,434 171,024 7.84% Continuing Operations: Interest Income 139,524 128,323 8.73% Interest Expense -48,781 -36,966 31.96% Net Interest Income 90,743 91,357 -0.67% Impairment Charge for Credit Losses
Slide 9: Strengthening earnings and profitability...
Strengthening earnings and profitability... Comments Consistently high Net Interest Margin Despite the pressure on Net Interest Margin (NIM) due to CRR increase by the CBN, NIM inched up QoQ by 1.5% from 8.02% in Q1 2014 to 8.14% in Q2 2014. Cost to Income Ratio remained flat YoY and QoQ. Growth
Slide 10: Revenue Base …Sustained Diversification
Revenue Base …Sustained Diversification H1 2014 H1 2013 Interest Income PBT Interbank N'million H1 2014 H1 2013 YoY Placements 1.8% Interbank Placements 2,334 2,274 3% T-Bills & Inv. Securities 30,201 46,463 -35% T-Bills & Govt & Other Bonds 17,360 13,799 26% Inv. Loans & Advances 89,629 65,787 36%
Slide 11: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. H1 2014 Interest Expenses H1 2013 N'million H1 2014 H1 2013 YoY Current accounts 2,018 2,318 -13% Inter- Borrowed Current Borrowed Savings accounts 2,449 1,519 61% bank funds accounts Inter- funds Current takings 1.0% 6.3% Time deposits 39,551 32,2
Slide 12: Balance Sheet - Assets
Balance Sheet- Assets Group Group YTD Group (N'm) Jun-14 Dec-13 Change Jun-13 Cash and balances with central banks 556,416 603,851 -7.86% 284,196 Treasury bills 335,833 586,441 -42.73% 649,673 Due from other banks 501,686 256,729 95.41% 346,613 Derivative assets held for risk management 1,939 2,681
Slide 13: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YTD Group (N'm) Jun-14 Dec-13 Change Jun-13 Customers deposits 2,304,976 2,276,755 1.24% 2,000,997 Current income tax 2,171 7,017 -69.06% 1,017 Deferred income tax liabilities 1,106 678 63.13% 5,578 Other liabilities 175,685 215,643 -18.53% 201,686 On-
Slide 14: Sustained assets & liabilities match
Sustained assets & liabilities match…... Loans Growth Loans & Advances H1 2014 H1 2013 Advances Advances On- under under lending finance On-lending finance Facilities lease Facilities lease 5.7% 0.9% 5.3% 1.5% Overdrafts Overdrafts 29.5% 32.1% Term Term Loans Loans 63.7% 61.4% Deposits Growth Deposi
Slide 15: Continued market dominance through strong liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… H1 2014 H1 2013 Current Liquid Assets Current balances with banks balances with Current within Nig. Current N'million H1 2014 H1 2013 YoY banks within balances with 0.9% balances Nig. banks outside Cash 50,880 44,086 15% Tr
Slide 16: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Stanley Amuchie Sli
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue H1 2014 6 Months Ended Rest of Nigeria Nigeria Europe Eliminations Consolidated 90.79% June 2014 (N’m) Africa Total Revenue 177,608 12,694 5,318 -10,861 184,759 Total Expense -119,369 -7,516 -3,794 3,779 -126,900 Profit Before Tax 58,239 5,178 1,524 -7,082 57,859 Tax
Slide 18: P&L – By Sector
P&L – By Sector Discontinued Consolidated 6 Months Ended June 2014 (N’m) Corporate Institutional Public Retail Operations Total Revenue 84,840 29,509 31,354 38,731 0 184,434 Total Expenses -53,225 -21,518 -16,455 -35,378 0 -126,576 Profit Before Tax 31,615 7,992 14,899 3,353 0 57,859 Tax -5,690 -1,4
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector H1 2014 Total Deposits - N2.30tn H1 2014 Gross Loans - N1.41tn 19
Slide 20: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Stanley Amuchie Sli
Slide 21: Healthy Risk Assets Portfolio…
Healthy Risk Assets Portfolio… NPL Coverage Ratio Our Risk Management Strategy 100.44% 96.06% 94.24% The group adopts a complete and integrated approach to risk 88.68% 82.18% management that is driven from the Board level to the operational activities of the bank. Risk management is practiced as
Slide 22: Focused risk management via portfolio diversification
Focused risk management via portfolio diversification Loans by Sector – H1 2014 Loans by Sector – H1 2013 Real Estate and Finance and Construction Insurance Flour Mills 6.15% Real Estate and Communication Finance and Flour Mills Construction 1.46% 3.61% 12.44% Communication Insurance 3.98% 16.48% 7.
Slide 23: NPL by Segment
NPL by Segment H1 2014 H1 2013 Agriculture Education Agriculture General 2.3% 0.0% 1.2% General Commerce/ Others Commerce/ Others Communication Trading 0.2% 2.4% Oil and Gas 20.2% Oil and Gas Trading 6.9% 10.7% 21.7% Education 19.6% Transportation 0.5% Capital Market 1.5% 7.9% Consumer Credit Commun
Slide 24: Strong Capitalization and Liquidity
Strong Capitalization and Liquidity Liquidity and Capital Adequacy 64.0% 63.0% 64.0% 63.5% 60.5% Capital and liquidity ratios for the Bank – well 27.0% 28.0% 26.0% 26.5% 22.6% above industry requirements. Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Liquidity Capital Adequacy Capital Mix Capital base – predom
Slide 25: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Stanley Amuchie Sli
Slide 26: 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 27: 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 28: Outlook and Prospects for FY2014
Outlook and Prospects for FY2014 Upstream Oil & Gas: The large international oil Agriculture: The Federal government’s resolve to boost the agricultural sector in the country would no doubt create quite companies are divesting from their on-shore and shallow- a number of opportunities in the are
Slide 29: Outlook and Prospects for FY2014
Outlook and Prospects for FY2014 Mobile & Internet Banking: Zenith Bank Plc has taken Deposit Base: Our drive for low cost and appropriately advantage of mobile and internet banking licenses to promote mixed deposit base to fund our credit and money market internet corporate banking solutions an
Slide 30: Thank you
Q&A Thank you 32