Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — Q3 2016 Earnings Presentation
28 slides from Zenith Bank's earnings presentation, September 2016
Slide 1: Q3 2016 Group Results Presentation to Investors & Analysts
Q3 2016 Group Results Presentation to Investors & Analysts September 2016 ZENITH BANK PLC
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 Slides 4 - 6 Results – Group Slides 8-16 3
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 declined to -2.06% y/y in Q2 2016, down by 170bps from -0.36% recorded in Q1 2016. Key Headline Inflation: Theme Headline Inflation increased to 17.9% y/y in Sept’16 from 17.6% y/y recorded in A
Slide 5: New CBN Circulars and Other Directives
New CBN Circulars and Other Directives FX Market Stabilization In order to stabilize the exchange rate and narrow the gap between official and parallel market rates, the Central Bank of Nigeria (CBN) will, in the coming weeks, license 20 new International Money Transfer Operators (IMTOs) to handle a
Slide 6: Our Investment Proposition
Our Investment Proposition Strong earnings capacity and growth, solid and liquid capital base, strengthened ERM practices, good returns on investment and excellent customer service A dominant player in the Nigerian Banking Industry: Key Controls a significant share of the high end corporate clien
Slide 7: Agenda
Agenda Overview & Operating Environment Slides 4 - 6 Results – Group Slides 8-16 3
Slide 8: Financial Highlights
Financial Highlights Key Efficiency and Risk Management for Superior Performance Theme Building A Shock-Proof Balance Sheet Gross Earnings: N380.35bn +12.91% YoY Net Interest Income: N285.672bn +11.27% YoY P&L Net Interest Margin: 7.60% -3.80% YoY PBT: N121.28bn +16.55% YoY PAT: N100.07bn +20.44% Yo
Slide 9: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 9 mths to 9 mths to YOY Sep-16 Sep-15 Change Gross Income 380,352 336,853 12.91% Continuing Operations: Interest and similar income 285,674 256,737 11.27% Interest and similar expense -95,857 -95,337 0.55% Net interest income 189,817 161,400 17.61% Impairmen
Slide 10: Consolidating earnings and profitability...
Consolidating earnings and profitability... Comments Net Interest Margin Net Interest Margin (NIM) decreased YoY by 3.8% (from 7.9% in Q3 2015 to 7.6% in Q3 2016) as a 7.90% 8.10% 7.90% 8.00% 7.60% result of rise in cost of funding. Cost-to-Income Ratio declined by 2.4% YoY (from 55.1% in Q3 201
Slide 11: Revenue Base …Sustained Diversification
Revenue Base …Sustained Diversification Q3 2016 Interest Income Q3 2015 PBT N'million Q3 2016 Q3 2015 YoY Interbank Placements 1,434 6,401 -78% Treasury Bills 37,349 39,301 -5% Govt & Other Bonds 38,442 22,622 70% Loans & Advances 208,449 188,411 11% Total 285,674 256,735 11% Zenith Group recorded
Slide 12: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. Q3 2016 Interest Expenses Q3 2015 Current Borrowed accounts N'million Q3 2016 Q3 2015 YoY funds 4.0% 11.6% Savings Current accounts 2,528 3,771 -33% accounts Savings accounts 10,404 8,131 28% 8.5% Time Deposits 56,266 72,358 -22% Borrowed funds 26,
Slide 13: Balance Sheet- Assets
Balance Sheet- Assets Group Group YTD Group (N'm) Sep-16 Dec-15 Change Sep-15 Cash and balances with central banks 555,891 761,561 -27.01% 565,124 Treasury bills 424,399 377,928 12.30% 356,853 Assets pledged as collateral 354,481 265,051 33.74% 263,027 Due from other banks 455,823 272,194 67.46% 472
Slide 14: Balance Sheet- Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YTD Group (N'm) Sep-16 Dec-15 Change Sep-15 Customers deposits 2,691,985 2,557,884 5.24% 2,521,828 Derivative liabilities 74,996 384 19430.21% 333 Current income tax 5,608 3,579 56.69% 3,627 Deferred income tax liabilities 46 19 142.11% 36 Other liabil
Slide 15: Sustained assets & liabilities match
Sustained assets & liabilities match…... Loans & Advances Loan Growth Q3 2015 Q3 2016 Advances Advances under under 2,490.6 finance On-lending finance 2,334.0 On- Facilities lease lease lending 0.3% 5.5% 0.7% 2,032.3 1,973.5 1,879.6 Facilities 13.7% Overdrafts Overdrafts 32.2% N'bn 25.3% Term Term L
Slide 16: Continued market dominance through strong liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… Q3 2016 Liquid Assets Q3 2015 Assets pledged Assets Due from Due from as pledged as N'million Q3 2016 Q3 2015 YoY other other banks collateral collateral banks 34.5% Cash 42,038 72,243 -42% 21.7% 26.8% 38.9% Operating accou
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue 9 Months Ended Sept Rest of Nigeria Europe Eliminations Consolidated 2016 (N’m) Africa Q3 2016 Nigeria 380,352 89.9% Total Revenue 347,196 27,422 11,481 -5,747 Share of profit of Associates - - - - - Total Expenses & Charges -230,557 -17,024 -12,161 1,105 -258,637 Pr
Slide 18: P&L – By Sector
P&L – By Sector Gross Revenue 9 Months Ended Corporate & Q3 2016 Public Retail Consolidated Sept 2016 (N’m) Commercial Total Revenue 206,560 59,302 114,490 380,352 Total Expenses -120,381 -52,109 -86,587 -259,077 Profit Before Tax 86,179 7,194 27,903 121,275 Tax -15,066 -1,258 -4,878 -21,201 Profit
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector Q3 2016 Total Deposits - N2.69tn Q3 2015 Total Deposits - N2.52tn Q3 2016 Gross Loans - N2.49tn Q3 2015 Gross Loans - N1.88tn 19
Slide 20: Healthy Risk Assets Portfolio…
Healthy Risk Assets Portfolio… Our Risk Management Strategy NPL Coverage Ratio The Group adopts a complete and integrated approach to risk management that is driven from the Board level to the operational activities of the bank. Risk management is practiced as a collective responsibility coordin
Slide 21: Focused risk management via portfolio diversification
Focused risk management via portfolio diversification Loans by Sector – Q3 2016 Loans by Sector – Q3 2015 o Gross Loans – N2.49tn o Gross Loans – N1.88tn Well Diversified Loan Portfolio 21
Slide 22: NPL by Sectors
NPL by Sectors Q3 2016 Q3 2015 o Total NPLs – N55.54bn o Total NPLs – N30.73bn o NPL Ratio – 2.23% o NPL Ratio – 1.63% o We continue to develop our Risk Management Strategy and improve on the quality of our loan portfolio. o Overall NPL ratio of 2.23% is currently one of the lowest in the industry 2
Slide 23: Strong Capitalization and Liquidity
Strong Capitalization and Liquidity Liquidity and Capital Adequacy Capital and liquidity ratios for the Bank – well above industry requirements of 30% for Liquidity and 15% Capital Adequacy Ratio for Banks with international authorization and are systematically significant. Capital Mix Capital base
Slide 24: 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 25: Our Key Growth Target Sectors
Our Key Growth Target Sectors Driving profitability with our competitive advantages Sector Identified Growth Sectors Competitive Advantage Business line & Geography Infrastructure Strong capital and liquidity Manufacturing Strong brand Petrochemicals Strong international rating Retail Extens
Slide 26: Outlook and Prospects for FY2016
Outlook and Prospects for FY2016 Retail Banking: The bank will continue to grow its retail Customer Services : At the center of the Group’s pursuit of business especially in liability generation. This will be excellent customer service, we would continue to focus on achieved through the deployme
Slide 27: Guidance for FYE 2016
Guidance for FYE 2016 FYE 2016 Guidance Q3 2016 Achieved FYE 2015 Achieved Capital Adequacy 18.00% 19.00% 21.00% ROAE 18.50% 20.70% 18.40% Cost to Income 55.00% 53.80% 57.20% ROAA 2.60% 3.10% 2.70% NIM Business line & 8.00% 7.60% 8.10% Liquidity Ratio 44.00% 55.20% 51.40% Geography NPL 2.50% 2.23% 2
Slide 28: Thank you
Q&A Thank you 32