Slide 1: Full Year Report
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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: 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 Overview Inter
Slide 4: Operating Environment Overview
Operating Environment Overview © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 5: Nigerian Economy and Key Developments in the Banking Sector
Nigerian Economy and Key Developments in the Banking Sector • With an improving macroeconomic environment, GDP Growth Rate Nigeria remains Africa’s largest economy with 2.11% 1.95% 2.38% 1.81% strong sectors and significant opportunities. 1.40% 1.50% 0.72% Real GDP Growth: Nigeria recorded a real
Slide 6: Our Investment Proposition
Our Investment Proposition Market Leadership, growth capacity, solid and liquid capital base, strengthened ERM practices, good returns on investment and excellent customer service A dominant player in the Nigerian Banking Industry: Controls a significant share of the high end corporate clients in
Slide 7: Non-financial Highlights – FYE 2018
Non-financial Highlights – FYE 2018 © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 7
Slide 8: Group Results
Group Results © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 9: Financial Highlights – FYE 2018
Financial Highlights – FYE 2018 Key Themes Income Statement Balance Sheet Gross earnings: Gross loans: N2.02Tn (10.5%) YoY N630.3Bn (15.4%) YoY Efficiency and risk Total assets: N5.96Tn +6.4% YoY management for superior Net interest income: performance N295.6Bn +14.6% YoY Customers’ deposits: N3.69T
Slide 10: Financial Highlights – FYE 2018 Contd.
Financial Highlights – FYE 2018 Contd. Key Ratios 31-Dec-18 31-Dec-17 % change Return on average equity (RoAE) 23.8% 22.9% 3.9% Return on average assets (RoAA) 3.35% 3.36% (3.0%) Earnings per share (EPS) N6.15 N5.53 11.2% Net interest margin - NIM (Adjusted) 8.9% 8.9% 0% Cost of funds 3.1% 5.2% (40.
Slide 11: Profit or Loss Statement
Profit or Loss Statement Strong profitability, driven by the 3 C’s: cost of funding cost of risk cost to income Group Group YOY (N’Million) 2018 2017 Change Gross earnings 630,344 745,189 -15.41% Interest and similar income 440,052 474,628 -7.28% Interest and similar expense (144,458) (216,637
Slide 12: Consolidating on Operating Efficiency and Profitability
Consolidating on Operating Efficiency and Profitability • Zenith Bank has delivered an attractive earnings profile supported by improved operating efficiency. Comments 232 PBT (N’Bn) 199 PBT increased by 16.2% YoY from N199.31bn in 2017 to 157 N231.7bn in 2018, driven by improved operating 120 126
Slide 13: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. • Zenith Bank has delivered an attractive earnings profile supported by improved operating efficiency. Comments Cost of funds & Net interest margin 8.4% 8.9% 8.9% 8.1% 7.7% Net Interest Margin - NIM remained flat at 8.9%, demonstrating the Group’s ab
Slide 14: Trend of Revenue Base
Trend of Revenue Base • Decline in interest income and trading income was due to the lower yielding environment in 2018 compared to 2017. Average 1 year T-bills yield (2018 – 15%, 2017 – 21%). 475 440 384 348 313 158 N’Bn 80 92 90 71 20 68 16 61 18 2014 2015 2016 2017 2018 Interest income Trading in
Slide 15: Revenue Base: Interest Income Diversification
Revenue Base: Interest Income Diversification • Interest income declined by 7% YoY as a result of the reduction in total loans to customers and a lower yield environment. • The Group has maintained a consistent mix of interest income across the various interest-generating assets over the years. Inte
Slide 16: Revenue Base: Non-Interest Income Diversification
Revenue Base: Non-Interest Income Diversification • Fees on electronics products grew by 44% reflecting increased volume of transaction across various channels (ATMs, POS, mobile banking, electronic banking) 2018 N'million 2018 2017 YoY 2017 Credit related fees 19,309 20,834 -7% Other fees & Account
Slide 17: Interest Expense: Cost of Funds Optimization
Interest Expense: Cost of Funds Optimization • Interest expense dropped by 33%, reflecting success in cost of funds optimization. Interest Expenses Current 2018 accounts 7.6% Savings accounts Time 12.9% N'million 2018 2017 YoY deposits 29.3% Current accounts 10,952 10,029 9% Borrowed funds and lease
Slide 18: Continuous Effort at Cost-Reduction Strategies
Continuous Effort at Cost-Reduction Strategies • The Group was able to contain its operating expenses growth at 1% YoY reflecting the ggroup's continuous drive towards cost optimization. Total Operating Expenses 2018 2017 Depreciation & Security & Fuel & Travel & Outsourcing N'million 2018 2017 YoY
Slide 19: Balance Sheet – Assets
Balance Sheet – Assets • Strong and liquid balance sheet led by securities portfolio and interbank placements. Group Group YoY (N’Million) Dec-18 Dec-17 Change Cash and balances with Central Banks 954,416 957,663 -0.34% Treasury bills 1,000,560 936,817 6.80% Assets pledged as collateral 592,935 468,
Slide 20: Balance Sheet – Liabilities & Equity
Balance Sheet – Liabilities & Equity • Assets are largely funded by deposits with a strong capital base providing a buffer for further growth. (N’Million) Group Group YoY Liabilities Dec-18 Dec-17 Change Customers deposits 3,690,295 3,437,915 7.34% Derivative liabilities 16,995 20,805 -18.31% Curren
Slide 21: Balance Sheet – Currency Breakdown
Balance Sheet – Currency Breakdown • Diversification of funding base contributes to matching FX loan exposures. Loans and Advances (Net) (N’million) @ December 31, 2018 Naira Dollar GBP Euro Others Total 2018 Cash and balances with central banks 436,185 469,608 6,049 4,838 37,736 954,416 Others Trea
Slide 22: Sustained Assets & Liabilities Match
Sustained Assets & Liabilities Match • Deposit funded loan portfolio, with largely term loans to top-rated corporates. • Deposit base is predominantly current accounts which supports attractive net interest margin extraction with increasing savings account balance. Gross Loans Loans & Advances 2018
Slide 23: Continued Market Dominance
Continued Market Dominance • Highly liquid balance sheet, with diversified funding sources. Liquid Assets 2018 N'million 2018 2017 YoY 2017 Due from Assets Assets pledged as Cash 148,266 150,883 -2% pledged as collateral other banks Operating accounts with CBN 100,679 159,666 -37% collateral Due fro
Slide 24: Risk Management
Risk Management © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 25: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio • Strong risk management has contained NPL ratio with adequate coverage levels NPL Coverage Ratio Our Risk Management Strategy The significant growth in Coverage Ratio in 2018 The Group adopts a complete and integrated approach to risk was as a result of IFRS 9 impl
Slide 26: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Asset quality is supported by a well diversified loan portfolio. Loans by Sector – FYE 2018 Loans by Sector – FYE 2017 Communication Flour Mills Communication 2.8% Transportation 6.6% Real Estate and 4.2% 1.4% Transportation Real Estate and Con
Slide 27: NPL by Sector
NPL by Sector FYE 2018 FYE 2017 General Education Communication Commerce/Trading Agriculture 0.17% 2.37% 9.92% Agriculture General 0.90% 1.17% Commerce/Trading Government 28.19% 0.17% Power Oil and Gas 0.06% 37.42% Education Transportation Oil and Gas 0.17% 0.18% 38.23% Finance and Communication Ins
Slide 28: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans – 2018 Cumulative Restructured Loans – 2018 % to US$ % to total % to USD loans by sector US#039; m N'm % to Gross loans loans Restructured Loans by sector N'm Restructured loans 1,128 404,882 48.72% 22.21% loans Oil and gas Oil and gas
Slide 29: Strong Capitalisation and Liquidity
Strong Capitalisation and Liquidity • Liquidity buffer well in excess of regulatory requirements. Solid and high-quality capital position provides room for further growth. Liquidity & Capital Adequacy 69.7% 72.0% 59.6% 51.4% Capital and liquidity ratios for the Bank – 46.8% well above industry requi
Slide 30: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2018 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 • Percentage of gross revenue attributable to retail segment more than doubled from 3.8% in 2017 to 7.8% in 2018. 12 Months Ended December 2018 Gross Revenue (N’million) Commercia
Slide 32: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments • Corporate-oriented franchise, with improving retail component (percentage contributions from retail deposits and loans have grown in 2018). Gross Loans Total Deposits 2018 Gross Loans – N2.02 Trillion 2018 Total Deposits – N3.69 Trillion Commercial/ SMEs Com
Slide 33: Electronic Banking Products Performance
Electronic Banking Products Performance • The bank recorded a remarkable growth in both value and volume of electronic product transactions, resulting in a 44% (ref.: slide 16) growth in income on electronic products Value of Electronic Product Transactions Volume of Electronic Product Transactions
Slide 34: Geographical Presence
Geographical Presence © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 34
Slide 35: Performance by Geography
Performance by Geography • Subsidiaries contribution to the Group’s revenue has improved from 8.9% to 13.9% YoY, improving revenue diversification by geography 12 Months Ended December 2018 Gross Revenue (N’Million) Nigeria 2018 86.2% Nigeria Rest of Africa Europe Eliminations Consolidated Total Rev
Slide 36: Strategy & Outlook
Strategy & Outlook © 2018 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 37: Strategies for Driving our Vision
Strategies for Driving our Vision The Bank accomplishes this 1 The Bank focuses on cost 2 strategy by: effective deposits from Leverage on robust digital platform Compete the retail end of the market to lend to the Delivering superior Consistent focus and investment in aggressively for attra
Slide 38: Our Key Growth Target Sectors
Our Key Growth Target Sectors Driving Profitability with our Competitive Advantages Identified Growth Sectors Competitive Advantage Agriculture Strong capital and liquidity Infrastructure Strong brand Manufacturing Strong international rating Petrochemicals Extensive branch network
Slide 39: Outlook and Prospects for FY2019
Outlook and Prospects for FY2019 Customer Services: At the center of the Group’s pursuit of Retail Banking: The bank is committed to continue to grow its excellent customer service, we would continue to focus on retail business. This will be achieved through the deployment of strengthening our r
Slide 40: Guidance for FYE 2019
Guidance for FYE 2019 FYE 2018 Guidance FYE 2018 Achieved FYE 2019 Guidance PBT N215.0Bn N231.7Bn N240.0Bn Effective Tax Rate 15.0% 16.5% 15.0% PAT N182.7Bn N193.4Bn N204.0Bn ROAE 23.4% 23.8% 24.0% ROAA 3.5% 3.4% 3.6% NIM (Adjusted) 9.0% 8.9% 9.1% Cost of Funds 3.5% 3.1% 3.5% Cost of Risk 1.0% 0.9%
Slide 41: 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