Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — Q3 2014 Earnings Presentation
30 slides from Zenith Bank's earnings presentation, September 2014
Slide 1: Q3 2014 Group Results Presentation to Investors & Analysts
Q3 2014 Group Results Presentation to Investors & Analysts September 2014 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 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: Chief Financial Officer Stanley Amuchie Slides 17 -19 Co
Slide 4: Nigerian Economy and Key Developments in the Banking Sector
Nigerian Economy and Key Developments in the Banking Sector Real GDP Growth (Rebase): The GDP grew at the rate of 6.54% y/y in Q2 2014, up by 114bps from 5.40% recorded in the corresponding quarter of previous fiscal year. Key The non-oil sector was the major driver of the growth recorded in Q2
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: Chief Financial Officer Stanley Amuchie Slides 17 - 19 C
Slide 7: Financial Highlights
Financial Highlights Key On Course for an Impressive Performance in 2014 Theme Gross Earnings: N273.74bn +7.22% YoY Net Interest Income: N143.37bn +3.16% YoY Net Interest Margin: 8.00% -15.52% YoY P&L PBT: N86.82bn +4.55% YoY PAT: N71.05bn +1.86% YoY Customer Deposit: N2.31tn +1.44% (YTD) Balance To
Slide 8: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 9 mths to 9 mths to YOY Sep-14 Sep-13 Change Gross Income 273,738 255,299 7.22% Continuing Operations: Interest Income 213,011 190,968 11.54% Interest Expense -69,644 -51,989 33.96% Net Interest Income 143,367 138,979 3.16% Impairment Charge for Credit Losse
Slide 9: Strengthening earnings and profitability...
Strengthening earnings and profitability... Comments Consistently high Net Interest Margin Net Interest Margin (NIM) declined YoY by 15% (from 9.47% in Q3 2013 to 8.00% in Q3 2014) due to CRR increase and savings deposit rate increase by the CBN. It however declined only by 1.7% QoQ (Q2 - 8.14% ; Q
Slide 10: Revenue Base ...Sustained Diversification
Revenue Base …Sustained Diversification Interest Income Q3 2014 Q3 2013 PBT N'million Q3 2014 Q3 2013 YoY Interbank Placements 4,271 2,897 47% Treasury Bills 41,910 63,854 -34% Govt & Other Bonds 25,016 23,023 9% Loans & Advances 141,814 101,194 40% Total 213,011 190,968 12% - Interest income from T
Slide 11: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. Q3 2014 Interest Expenses Q3 2013 N'million Q3 2014 Q3 2013 YoY Current accounts 2,969 3,301 -10% Savings accounts 3,871 2,668 45% Time deposits 55,548 43,898 27% Inter-bank takings 2,645 1,418 87% Borrowed funds 4,611 704 555% Total 69,644 51,989
Slide 12: Balance Sheet - Assets
Balance Sheet- Assets Group Group YTD Group (N'm) Sep-14 Dec-13 Change Sep-13 Cash and balances with central banks 556,330 603,851 -7.87% 535,092 Treasury bills 445,485 586,441 -24.04% 464,899 Due from other banks 426,165 256,730 66.00% 284,343 Derivative assets held for risk management 1,970 2,681
Slide 13: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YTD Group (N'm) Sep-14 Dec-13 Change Sep-13 Customers deposits 2,309,614 2,276,755 1.44% 2,033,971 Current income tax 1,778 7,017 -74.66% 1,864 Deferred income tax liabilities 482 678 -28.91% 5,578 Other liabilities 274,698 215,643 27.39% 227,162 On-le
Slide 14: Sustained assets & liabilities match
Sustained assets & liabilities match…... Loans Growth Loans & Advances Q3 2014 Q3 2013 Deposits Growth Deposits Mix Q3 2014 Q3 2013 14
Slide 15: Liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… Q3 2014 Q3 2013 Liquid Assets N'million Q3 2014 Q3 2013 YoY Cash 51,572 29,946 72% Operating accounts with CBN 113,144 166,031 -32% Mandatory reserve deposits with CBN 391,614 339,115 15% Treasury bills 445,845 464,899 -4%
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: Chief Financial Officer Stanley Amuchie Slides 17 - 19 C
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue 9 Months Ended Rest of Nigeria Europe Eliminations Consolidated Sept 2014 (N’m) Africa Q3 2014 Total Revenue 253,822 15,868 7,858 -3,810 273,738 Total Expense -175,982 -9,195 -5,553 3,810 -186,920 Profit Before Tax 77,840 6,673 2,305 - 86,818 Tax -14,662 -551 -559 -
Slide 18: P&L – By Sector
P&L – By Sector Discontinued 9 Months Ended Sept 2014 (N’m) Corporate Institutional Public Retail Consolidated Operations Total Revenue 130,355 39,256 62,877 41,250 - 273,738 Total Expenses -89,710 -27,176 -33,078 -36,956 - -186,920 Profit Before Tax 40,645 12,081 29,799 4,294 - 86,818 Tax -7,384 -2
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector Q3 2014 Total Deposits - N2.31tn Q3 2014 Gross Loans - N1.56tn 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: Chief Financial Officer Stanley Amuchie Slides 17- 19 Co
Slide 21: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio… NPL Coverage Ratio Our Risk Management Strategy 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 22: Focused risk management via portfolio diversification
Focused risk management via portfolio diversification Loans by Sector – Q3 2014 Loans by Sector – Q3 2013 o Gross Loans – N1.56tn o Gross Loans – N1.14tn Well Diversified Loan Portfolio 22
Slide 23: NPL by Segment
NPL by Segment Q3 2014 Q3 2013 o Total NPLs – N44.01bn o Total NPLs – N35.67bn o NPL Ratio – 2.8% o NPL Ratio – 3.1% o We continue to develop our Risk Management Strategy and improve on the quality of our loan portfolio. o Overall NPL ratio of 2.8% is currently one of the lowest in the industry 23
Slide 24: Strong Capitalization and Liquidity
Strong Capitalization and Liquidity Liquidity and Capital Adequacy Capital and liquidity ratios for the Bank – well above industry requirements. Capital Mix Capital base – 99.66% 96.27% 97.32% 100.00% predominantly made up of Tier 1 (core capital) which consists of mainly share capital and 3.73% 2.6
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: Chief Financial Officer Stanley Amuchie Slides 17 - 19 C
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: Q&A Thank you
Q&A Thank you 32