Slide 1: Full Year 2022 Group Results Presentation to Investors & Analysts
202? REPORT MEE a SF i 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: Operating Environment & Non-financial Highlights
Operating Environment & Non- financial Highlights © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors &
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 3.52% y/y in Q4 2022. This was driven mainly by the Services sector which recorded a growth of 5.69% thereby contributing 56.27% to the aggregate GDP. 3.54% 3.52% 5.01% 3.11% H
Slide 6: Our Investment Proposition
Our Investment Proposition Corporate and retail space market dominance, formidable and liquid capital base, strengthened ERM practices and excellent value creation for shareholders backed by outstanding customer service. A dominant player in the Nigerian Banking Industry: Controls a significant sh
Slide 7: QR Banking
QR Banking Awards © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 7
Slide 8: Non-financial Highlights
Non-financial Highlights © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 8
Slide 9: Non-financial Highlights
Non-financial Highlights Social Impact/ESG footprint Awards • State Governments’ Security • Number One Bank in Nigeria by Tier-1 Capital 2022 – Funds And Infrastructure The Banker. • Private Sector Health Alliance • Best Bank in Nigeria 2022 – Global Finance. Project • Bank of the Year, Nigeria 2022
Slide 10: Group Results
Group Results © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 11: Financial Highlights – FYE 2022
Financial Highlights – FYE 2022 Income Statement Balance Sheet Gross earnings: Customers’ N945.6Bn deposits: N8.98Tn +24% YoY +39% YoY Net-interest Gross loans: income: N366.6Bn +14% YoY N4.12Tn +18% YoY Non-interest +23% YoY Total assets: +30% YoY income: N381.0Bn N12.29Tn Profit before tax: +2% Yo
Slide 12: Financial Highlights – FYE 2022 Contd.
Financial Highlights – FYE 2022 Contd. Key Ratios 31-Dec-22 31-Dec-21 % change Earnings per share (EPS) N7.14 N7.78 (8%) Return on average equity (RoAE) 16.8% 20.4% (18%) Return on average assets (RoAA) 2.1% 2.7% (22%) Net interest margin - NIM 7.3% 6.7% 9% Cost of funds 1.9% 1.5% (27%) Cost of risk
Slide 13: Profit or Loss Statement
Profit or Loss Statement • Strong profit before tax (PBT), bolstered by strong growth in interest income and trading gains. Group Group YoY (N’million) 2022 2021 Change Gross earnings 945,554 765,558 24% Interest and similar income 540,166 427,597 26% Interest and similar expense (173,539) (106,793)
Slide 14: Consolidating Earnings and Profitability
Consolidating Earnings and Profitability Zenith Group continues to deliver attractive Gross earnings (N’Bn) earnings profile, supported by robust 946 revenue base. 696 766 630 662 Gross earnings increased by 24% YoY from N766 billion in 2021 to N946 billion in 2022. 2018 2019 2020 2021 2022 PBT
Slide 15: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. Net Interest Margin Net Interest Margin - NIM expanded from 6.7% in 2021 to 7.3% in 2022 due to improved interest rates. 8.7% 8.3% 6.8% 6.7% 7.3% Cost of Funds rose to 1.9% in 2022 from 1.5% recorded in 2021 as a result of consistent rate hikes dur
Slide 16: Evolution of Revenue Base
Evolution of Revenue Base % to Total % to Total N'million 2022 2021 YoY • Contribution of interest Revenue Revenue income to total revenue Interest income 540,166 57.1% 427,597 55.9% 26.3% increased from 55.9% in Trading income 212,678 22.5% 167,483 21.8% 27.0% FYE 2021 to 57.1% in FYE Fees and comm
Slide 17: Revenue Base: Interest Income Lines
Revenue Base: Interest Income Lines • Increase in interest income across all elements, culminating in a 26% YoY growth. Interest Income FYE 2022 FYE 2021 Placement with N'million 2022 2021 YoY Placement with banks & discount banks & discount houses Loans and advances 370,446 292,224 27% Government h
Slide 18: Revenue Base: Non-Interest Income Diversification
Revenue Base: Non-Interest Income (NII) Diversification • Non-interest income increased by 23% YoY as impressive growth was recorded across most income lines. 2022 2021 Account N'million 2022 2021 YoY Account maintenance fee Fees on electronic products 45,739 37,470 22% maintenance fee Fees on elect
Slide 19: Interest Expense: Funding Cost Optimization
Interest Expense: Funding Cost Optimization Interest Expenses 2022 Current Borrowed accounts • Interest expense rose by 63% YoY, driven by the funds and lease 21.9% significant growth in deposits (39%) and rate 29.3% hikes. Savings accounts 18.5% Time deposits 30.3% N'million 2022 2021 YoY Current a
Slide 20: Continuous Efforts Towards Cost Optimisation
Continuous Efforts Towards Cost Optimisation. • Total operating expense grew by 17% YoY due to inflationary pressures and heightened regulatory costs. Total Operating Expenses 2022 2021 N'million 2022 2021 YoY Security & cash Security & cash Fuel & Fuel & Outsourcing handling handling Personnel expe
Slide 21: Balance Sheet – Assets
Balance Sheet – Assets • Strong and liquid balance sheet - well positioned for growth opportunities. Group Group YoY (N‘million) Dec-22 Dec-21 Change Cash and balances with central bank 2,201,744 1,488,363 48% Treasury bills 2,246,538 1,764,946 27% Assets pledged as collateral 254,663 392,594 (35%)
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 YoY Liabilities Dec-22 Dec-20 Change Customers’ deposits 8,975,653 6,472,054 39% Derivative liabilities 6,325 14,674 (57%) Current inco
Slide 23: 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 FYE 2022 FYE 2021 Debt N'million 2022 2021 YoY Due from Due from securities other banks Cash 85,437 84,077 2% Debt securities other banks 29.0% 23.1% 31.8%
Slide 24: Risk Management
Risk Management © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 25: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio NPL Coverage Ratio Our Risk Management Strategy The Group adopts a holistic and integrated approach to risk 192.4% management and therefore, brings all risks together under 148.2% one or a limited number of oversight functions. 113.9% 114.4% 115.9% Risk management i
Slide 26: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Well diversified loan portfolio across sectors supports asset quality. • Loans and advances grew by 18% YoY, while still maintaining the Group’s risk acceptance criteria. Loans by Sector – FYE 2022 Loans by Sector – FYE 2021 Flour Mills Communi
Slide 27: NPL by Sectors
NPL by Sectors FYE 2022 FYE 2021 General General Commerce Education Commerce Education 19.41% Agriculture 0.25% Agriculture 0.09% 6.12% 14.71% 1.20% Communication Communication Oil and Gas 0.05% Oil and Gas 15.36% 37.90% 44.37% Transportation 5.27% Transportation Power 0.85% 0.11% Consumer Governmen
Slide 28: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans Cumulative Restructured Loans FYE 2022 FYE 2022 % to USD loans by % to US$ % to Gross Restructured % to Gross US#039; m N'm N'm Restructured sector loans loans Loans by sector loans loans Oil and gas 1,615 744,857 48.6% 18.1% Oil and ga
Slide 29: Strong Capitalisation
Strong Capitalisation • Solid and high-quality capital position provides room for further growth. Liquidity & Capital Adequacy 80.9% 71.2% 75.0% 66.2% 57.3% Capital and liquidity ratios – well 25.0% 22.0% 23.0% 21.0% 19.0% above regulatory requirements of 30% for Liquidity and 15% for Capital Adequa
Slide 30: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 31: Performance – By Business Segments
Performance – By Business Segments • Continuous diversification and improved profitability across core business segments. Gross Revenue 2022 FY 2022 (N’million) Corporates Commercial/ 69.1% Corporates Public Retail Consolidated SMEs Public 16.2% Gross revenue 653,119 153,408 114,945 24,082 945,554 R
Slide 32: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments Gross Loans Total Deposit FYE 2022 Gross Loans – N4.12 Trillion FYE 2022 Total Deposits – N8.98 Trillion Commercial Commercial& & SMEs SMEs Corporates 19.8% 18.2% 27.1% Public Retail 10.5% 5.0% Corporates 62.3% Public Retail 12.9% 44.2% FYE 2021 Gross Loans –
Slide 33: Electronic Banking Products Performance by Channels
Electronic Banking Products Performance by Channels. Value of Electronic Product Transactions Number of Electronic Product Transactions FYE 2022 FYE 2021 YoY FYE 2022 FYE 2021 YoY Total Transaction Total Number of 103,734 85,008 22% 2,231 1,953 14% Value (N'bn) Transactions (million) 46,046 674 705
Slide 34: Geographical Presence
Geographical Presence © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 34
Slide 35: Performance by Geography
Performance by Geography 2022 PBT 12 Months Ended December 2022 (N’million) Nigeria Rest of Africa Europe Eliminations Consolidated Total Revenue 844,972 79,647 39,572 (18,637) 945,554 Total expense (543,123) (101,896) (18,997) 3,112 (660,904) Profit before tax 301,849 (22,249) 20,575 (15,525) 284,6
Slide 36: Strategy & Outlook
Strategy & Outlook © 2022 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 37: 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 for market share while Attracting talented people and of the market for Deliver superior investing in training. focusing on high deployment in
Slide 38: Guidance for FYE 2023
Guidance for FYE 2023 FYE 2022 Guidance FYE 2022 Achieved FYE 2023 Guidance PBT N294Bn N285Bn N330Bn Effective Tax Rate 15% 21% 22% PAT N250Bn N224Bn N257Bn ROAE 20% 16.8% 20.0% ROAA 2.5% 2.1% 2.5% NIM 7.2% 7.3% 8.0% Cost of Funds 2.0% 1.9% 2.2% Cost of Risk 2.0% 3.2% 2.0% Cost to Income 48.0% 54.4%
Slide 39: 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