Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — H1 2024 Earnings Presentation
41 slides from Zenith Bank's earnings presentation, 2024
Slide 1: 2024 Half-Year Report: Results Presentation to Investors and Analysts
Draft ZENITH BANK 2024 FULL YEAR RESULTS PRESENTATION 2024 HALF-YEAR REPORT 2023 Full Year Results Presentation Zenith Bank Plc PRESENTATION TO INVESTORS AND ANALYSTS © 2024 ZENITH BANK PLC | First Half Group © 2024Presentation Results ZENITH BANK PLC | First to Investors Half Group & Analysts 1 Str
Slide 2: Agenda
Agenda 1 NIGERIAN MACRO AND OPERATING ENVIRONMENT 2 FINANCIAL HIGHLIGHTS 3 GROUP RESULTS 4 RISK MANAGEMENT 5 BUSINESS SEGMENTS PERFORMANCE AND SUBSIDIARY REVIEW 6 ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) 7 STRATEGY AND OUTLOOK © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investo
Slide 3: Disclaimer
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 Int
Slide 4: Nigerian Macro and Operating Environment
Nigerian Macro and Operating Environment © 2024 ZENITH BANK©PLC 2024 ZENITH | First BANKResults Half Group PLC | Presentation First Half Group to Investors & Analysts Results Presentation to Investors & Analysts
Slide 5: Macroeconomic and Operating Environment Overview
Macroeconomic and Operating Environment Overview • Q2 GDP growth mainly attributable to the Services sector • Marginal increase in foreign reserves in Q2 as against end of Q1 • Oil production on a decline in Q2 2024 GDP Growth Rate Inflation Rate Real GDP Growth: Nigeria’s real GDP grew by 3.19% y
Slide 6: Macroeconomic and Operating Environment Overview
Macroeconomic and Operating Environment Overview Nigeria's economy expanded through services growth, inflation management, Naira stabilization, and strategic policy reforms Foreign Portfolio Investment Net Open Position Nigeria is now an attractive market for FPIs in both capital markets Effective 1
Slide 7: Macroeconomic and Operating Environment Overview
Macroeconomic and Operating Environment Overview Gateway to West Africa, with 20% of Africa’s population and one of the continent’s largest economies, Nigeria benefits from a growing market for banking services driven by demographic growth, economic development, and digital connectivity Robust GDP G
Slide 8: Financial Highlights
Environment, Financial Highlights Social & Governance © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 9: Market Leadership
Market Leadership Zenith Bank: A dominant player in the Nigerian Banking industry with strong international presence Leading Bank in Nigeria Awards and Recognitions Nigeria’s largest bank by NGN 1.1 trillion Tier-1 capital at NGN 2.3 market NGN 27.6 trillion and ranked among capitalisation, the tril
Slide 10: Attractive Investment Proposition
Attractive Investment Proposition A Formidable Player in The Nigerian Banking Industry ■ Nigeria’s largest bank, with a decade-long track record of the highest Tier-1 capital, delivering superior service quality Strong Financial Health: Diverse Income, Consistent Profits, and Growing Dividends ■ Imp
Slide 11: Group Results
Group Results © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 12: Income Statement
Income Statement Strong profit before tax, bolstered by growth in interest income and trading gains. Group Group YoY (N’million) 6M 24 6M 23 Change Gross income 2,101,372 967,261 117.2% Interest and similar income 1,149,436 415,425 176.7% Interest and similar expense (434,363) (153,564) 182.9% Net i
Slide 13: Strong Financial Performance
Strong Financial Performance Strong revenue from a diversified income stream and customer base, driving superior profitability and enabling consistent and growing dividend payments H1 2024 financial results were driven primarily by interest income and trading gains 43.4% 5Y CAGR 44.8% 5Y CAGR 27.3%
Slide 14: Strong Financial Performance
Strong Financial Performance Strong profit before tax, bolstered by growth in interest income and trading gains. Diversified Revenue Streams Net Interest Margin Diversified Revenue Streams: 9.0% Strong revenue through a diversified 8.8% 37.3% 41.0% 40.3% income stream and customer base, driving 45
Slide 15: Evolution of Revenue Base
Evolution of Revenue Base 177% year-on-year growth in interest income across most elements. Revenue (NGN’billion) 1,149 796 415 369 217 242 204 162 85 79 103 80 59 46 59 63 24 20 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 -6 -655 Interest income Trading income Fees & commission income Other operating income
Slide 16: Revenue Base: Interest Income and Non-Interest Income Diversification
Revenue Base: Interest Income and Non-Interest Income (NII) Diversification Continued diversification and growth in interest income across all elements resulting in a well fortified revenue base Interest Income – H1 2024 Interest Income – H1 2023 Placement w/banks Placement w/banks & disc. Others, 1
Slide 17: Interest Expense: Funding Cost Optimization
Interest Expense: Funding Cost Optimization Interest expense rose by 183% YoY, on the back of a 29% growth in deposits, exchange rate and general increase in interest rate environment Interest Expense – H1 2024 H1 2024 H1 2023 YoY Savings acc. 20% Time deposits, 26% Current acc. Current accounts 61,
Slide 18: Balance Sheet
Balance Sheet Strong and liquid balance sheet - well positioned for growth opportunities Group Group Ytd (NGN‘million) Jun-24 Dec-23 Change Cash and balances with central bank 4,462,965 4,253,374 5% Treasury bills 2,974,384 2,736,273 9% Assets pledged as collateral 184,586 308,638 (40%) Due from oth
Slide 19: Balance Sheet
Balance Sheet Assets are largely funded by deposits with a strong capital base providing buffer for further growth. (NGN'million) Group Group Ytd Jun-24 Dec-23 Change Customers’ deposits 19,633,484 15,167,740 29% Derivative liabilities 44,736 70,486 (37%) Current income tax payable 34,686 33,877 2%
Slide 20: Gross Loans and Advances to Customers
Gross Loans and Advances to Customers 44% YTD growth in gross loans, largely made up of Term Loans Gross Loans & Advances to Customers by Product (NGN’billion) 7,819 5,292 3,789 1,746 1,099 913 680 665 586 Term Loans Overdraft Onlending Jun-23 Dec-23 Jun-24 © 2024 ZENITH BANK PLC | First Half Group
Slide 21: Deposits
Deposits Deposits predominantly made up of current and savings account (CASA) Deposits by product (NGN’billion) 8,567 6,875 5,785 5,784 3,245 2,858 2,593 2,689 2,189 2,204 2,050 1,587 Current Account Savings Account Term Deposits Domicilliary Accounts Jun-23 Dec-23 Jun-24 © 2024 ZENITH BANK PLC | Fi
Slide 22: Loan Portfolio and Provisions by Stages
Loan Portfolio and Provisions by Stages 54% of gross loans is made up of Stage 1 loans; a testament to the quality of the loan book Goss loans and advances (N’bn) Provisions (N’bn) Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Jun-22 Dec-22
Slide 23: Risk Management
Risk Management © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 24: Healthy Risks Assets Portfolio
Healthy Risks Assets Portfolio The Group adopts a holistic and integrated approach to risk management Strict Portfolio Management Strict Portfolio Management 4.4% 4.3% 4.5% 3.9% 3.8% Strict portfolio management practiced through credit assessment and approval processes to maintain loan portfolio h
Slide 25: Focused Risk Management through Portfolio Diversification
Focused Risk Management through Portfolio Diversification Loan portfolio is well diversified, reducing severe concentration risks Loans by Sector – H1 2024 Loan by Sector – FYE 2023 Loan Portfolio Cement Real Estate, 3.4% Real Estate, 3.3% Upstream Oil & Manufacturing, 4.6% Cement Gas, 19.0% Manufac
Slide 26: Robust Capital Base
Robust Capital Base Solid and high-quality capital position provides room for future growth Strong Capitalisation Funding Strategy and Capital Mix Fortress balance sheet underpins robust financial health, liquidity and stability Largest bank by Tier 1 capital, consistently delivering superior re
Slide 27: Foreign Currency (FCY) Loans
Foreign Currency (FCY) Loans The Oil and Gas sector has historically accounted for c.50% of the bank’s FCY loans Foreign Currency Loans 1H2024 Gross Loan Split by Currency – H1 2024 US$ m NGN m % to US$ loans % to Gross Loans Oil and gas 1,968 2,928,524 52.4% 28.9% Manufacturing 676 1,005,982 18.0%
Slide 28: Risk Management Strategy
Risk Management Strategy Zenith Bank's comprehensive risk management strategy positions it strongly to navigate through challenging macro environments Type of Risk Mitigation Measures Type of Risk Mitigation Measures Engaging in thorough strategic planning Implementing environmental policies B
Slide 29: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 30: Financial Performance: Profit by Business Segments
Financial Performance: Profit by Business Segments Continuous diversification and enhanced profitability across core business segments H1 2024 Summary Income Statement (NGN’million) Revenue by Business Segment – H1 2024 Commercial / Retail, 7.9% Corporates Public Retail Consolidated SMEs Public, 11.
Slide 31: Financial Performance: Loans and Deposits by Business Segments
Financial Performance: Loans and Deposits by Business Segments Impressive growth recorded in both gross loans and total deposits Loan Book Breakdown by Business Segment – H1 2024 Loan Growth Vs. Deposit Growth Deposit Breakdown by Business Segment – H1 2024 Public, Public, 9.7% Corporates, 10.7% 71.
Slide 32: Performance of Digital Banking Penetration
Performance of Digital Banking Penetration Cutting edge technology continues to support strong digital banking penetration Value of Electronic Transactions (NGN’billion) 40,089 33,214 24,453 22,943 22,386 21,654 20,822 20,109 5,303 3,383 3,421 760 855 1,981 265 270 478 673 ATM USSD Agency banking PO
Slide 33: Financial Performance: Geographical Presence
Financial Performance: Geographical Presence Zenith Bank's dominant footprint in Nigeria, combined with a growing presence in the West African region, and an international network, present exciting growth opportunities Zenith Bank Plc. (Parent) Zenith Pension Zenith Nominee Established 1990 Establis
Slide 34: Financial Performance: By Geography
Financial Performance: By Geography Significant growth in the contribution of subsidiaries to the Group profit before tax year-on-year H1 2024 Summary Income Statement (NGN’million) Profit Before Tax (NGN’billion) – H1 2024 Nigeria Rest of Africa Europe Eliminations Consolidated 645.3 Total revenue
Slide 35: Environment, Social & Governance
Environment, Social & Governance © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 36: Commitment to Environment, Social and Governance (ESG)
Commitment to Environment, Social and Governance (ESG) Strong commitment to sustainability, prioritising ethical business practices, community engagement and environmental sustainability Sustainability is an integral part of the bank’s corporate identity and at the heart of the business Donated medi
Slide 37: Commitment to Environment, Social and Governance (ESG)
Commitment to Environment, Social and Governance (ESG) Zenith Bank adheres to global sustainability principles and standards to ensure that corporate action is aligned with international best practices Zenith Bank has integrated sustainability into its corporate identity over the past fifteen years,
Slide 38: Strategy & Outlook
Strategy & Outlook © 2023 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 39: Strategic Growth Opportunities
Strategic Growth Opportunities Attractive growth opportunity to increase the Bank’s market share in the Nigerian market, expand its African footprint and enhance its international network Exciting growth opportunities, fuelled by emerging markets, technological advancements and shifting consumer pre
Slide 40: FY2024 Guidance
FY2024 Guidance Adjusted guidance on the FY2024 expected results H1 2024 Achieved FYE 2024 Guidance FYE 2023 Achieved FY2024 Guidance Profit before tax NGN727bn NGN1.3tn NGN796bn Effective tax rate 21% 15% 15% Profit after tax NGN578bn NGN1.1tn NGN677bn Return on average equity (ROAE) 41.9% 42% 36.6
Slide 41: Thank You
Thank You © 2024 ZENITH BANK PLC © 2024 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts 41