Slide 1: Q1 2016 Group Results Presentation to Investors & Analysts
Q1 2016 Group Results Presentation to Investors & Analysts March 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 Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 6 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 8- 16 Q&A 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 grew at the rate of 2.11% y/y in Q4 2015, down by 383bps from 5.94% recorded in the corresponding quarter of previous fiscal year. Key Headline Inflation: Theme Headline Inflation increased to 12.8% y/y i
Slide 5: New CBN Circulars and Other Directives
New CBN Circulars and Other Directives General Loan Loss Provisions The Central Bank of Nigeria has increased the General Loan Loss Provision (GLLP) for performing loans from 1% to 2% BASEL II Implementation A revised guideline on BASEL II implementation covering Pillar 1 (minimum capital Update req
Slide 6: 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 7: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Peter Amangbo Slides 4 - 6 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 8- 16 Q&A 7
Slide 8: Financial Highlights
Financial Highlights Key Efficiency and Risk Management for Superior Performance Theme Building A Shock-Proof Balance Sheet Gross Earnings: N99.44bn -12.25% YoY Net Interest Income: N58.16bn +36.42% YoY P&L Net Interest Margin: 7.90% +27.40% YoY PBT: N32.12bn -3.04% YoY PAT: N26.57bn -4.00% YoY Cust
Slide 9: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 3 mths to 3 mths to YOY Mar-16 Mar-15 Change Gross Income 99,435 113,322 -12.25% Continuing Operations: Interest and similar income 84,177 81,421 3.38% Interest and similar expense -26,020 -38,790 -32.92% Net interest income 58,157 42,631 36.42% Impairment c
Slide 10: Consolidating earnings and profitability...
Consolidating earnings and profitability... Comments Net Interest Margin Net Interest Margin (NIM) increased YoY by 27.4% (from 6.2% in Q1 2015 to 7.9% in Q1 2016) as the group continues to deploy its resources optimally. Cost-to-Income Ratio inched up marginally by 1% YoY (from 54.29% in Q1 201
Slide 11: Revenue Base …Sustained Diversification
Revenue Base …Sustained Diversification Interest Income Q1 2015 Q1 2016 N'million Q1 2016 Q1 2015 YoY PBT Interbank Placements 156 1,026 -85% Treasury Bills 11,643 13,832 -16% Govt & Other Bonds 12,668 7,221 75% Loans & Advances 59,710 59,342 1% Total 84,177 81,421 3% Zenith Group recorded a growt
Slide 12: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. Q1 2016 Interest Expenses Q1 2015 N'million Q1 2016 Q1 2015 YoY Current accounts 685 1,211 -43% Savings accounts 2,542 2,503 2% Borrowed funds 6,288 3,776 67% Time deposits 16,505 31,300 -47% Total 26,020 38,790 -33% Interest expense declined by
Slide 13: Balance Sheet- Assets
Balance Sheet- Assets Group Group YTD Group (N'm) Mar-16 Dec-15 Change Mar-15 Cash and balances with central banks 638,242 761,561 -16.19% 630,185 Treasury bills 441,882 377,928 16.92% 354,028 Assets pledged as collateral 259,303 265,051 -2.17% 186,419 Due from other banks 367,158 272,194 37.46% 547
Slide 14: Balance Sheet- Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YTD Group (N'm) Mar-16 Dec-15 Change Mar-15 Customers deposits 2,563,932 2,557,884 0.24% 2,682,575 Derivative liabilities 281 384 -26.82% 4,573 Current income tax 7,972 3,579 122.74% 13,632 Deferred income tax liabilities 35 19 - 30 Other liabilities 1
Slide 15: Sustained assets & liabilities match…
Sustained assets & liabilities match…... Loans & Advances Loan Growth Q1 2016 Q1 2015 Deposit Mix Deposit Growth Q1 2015 Q1 2016 15
Slide 16: Continued market dominance through strong liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… Q1 2016 Liquid Assets Q1 2015 N'million Q1 2016 Q1 2015 YoY Cash 82,372 33,661 145% Operating accounts with CBN 62,307 50,487 23% Treasury bills 441,882 363,290 22% Assets pledged as collateral 259,303 151,746 71% Due from
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue 3 Months Ended Mar Rest of Q1 2016 Nigeria Europe Eliminations Consolidated 2016 (N’m) Africa Total Revenue 90,199 7,496 2,278 -538 99,435 Share of profit of Associates - - - 48 48 Total Expense -61,933 -4,378 -1,590 539 -67,362 Profit Before Tax 28,266 3,118 688 49
Slide 18: P&L – By Sector
P&L – By Sector Gross Revenue 3 Months Ended Corporate Institutional Public Retail Consolidated Mar 2016 (N’m) Q1 2016 Total Revenue 52,729 13,230 7,437 26,039 99,435 Total Expenses -34,612 -11,140 -4,958 -16,603 -67,314 Profit Before Tax 18,117 2,089 2,479 9,435 32,121 Tax -3,073 -354 -420 -1,600 -
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector Q1 2016 Total Deposits - N2.56tn Q1 2015 Total Deposits - N2.68tn Q1 2016 Gross Loans - N1.97tn Q1 2015 Gross Loans - N1.93tn 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 – Q1 2016 Loans by Sector – Q1 2015 o Gross Loans – N1.97tn o Gross Loans – N1.93tn Well Diversified Loan Portfolio 21
Slide 22: NPL by Sectors
NPL by Sectors Q1 2016 Q1 2015 o Total NPLs – N42.91bn o Total NPLs – N32.84bn o NPL Ratio – 2.2% o NPL Ratio – 1.7% o We continue to develop our Risk Management Strategy and improve on the quality of our loan portfolio. o Overall NPL ratio of 2.2% is currently one of the lowest in the industry 22
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 16% 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 2015 Achieved FYE 2016 Projection Capital Adequacy 21.00% 19.00% ROAE 18.40% 18.50% Cost to Income 57.20% 55.00% ROAA 2.70% 2.60% NIM 8.10% 8.00% Business line & Liquidity Ratio 51.40% 44.00% Geography NPL 2.18% 2.50% NPL Coverage 96.90% 95.00% Loan to Deposit 67.20% 65.00%
Slide 28: Thank you
Q&A Thank you 32