Slide 1: Zenith Bank Plc Group Results for 9 Months Ended September 30, 2010
ZENITH BANK PLC GROUP RESULTS For 9 Months Ended September 30, 2010 Wednesday October 27, 2010 1
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 under the historical cost convention
Slide 3: Speakers
Speakers Godwin Emefiele – Managing Director/Chief Executive Officer Udom Emmanuel – Executive Director/Chief Financial Officer PeterAmangbo – Executive Director – Corporate Banking Andy Ojei – Executive Director/Chief Risk Officer 3
Slide 4: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 4
Slide 5: Zenith Bank Plc
Zenith Bank Plc In twenty years, the bank has demonstrated its resilience irrespective of the business/economic cycle and witnessed exponential growth in virtually all areas. Growth driven by strategic focus and conservative business model. Superior performance over the years through well motivated
Slide 6: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 6
Slide 7: Relatively Stable Macro-economic Environment
Relatively Stable Macro-economic Environment… 2008 2009 Q1’10 Q2’10 Q3’10 Q4’10 Est. GDP Growth (%) 6.1 6.9 7.36 7.69 7.72 7.78 Inflation (%) 15.1 12.4 14.8 14.1 13.60 13.92 Oil Price ($) 94.5 61.1 76.01 72.49 77.48 79.00 Exch. Rate (USD/NGN) 126.5 149.6 147.84 148.22 149.04 151.50 Foreign Reserves
Slide 8: Money Supply, Inflation and Interest Rates
Money Supply, Inflation and Interest Rates On the back of the recently reviewed benchmark Monetary Policy Rate (MPR) by 25bps to 6.25% amid inflationary concerns, we expect the following: Inter-bank rates to inch higher above the Standing Deposit Facility rate (3.25%) which is the benchmark for mone
Slide 9: Banking and Economic reforms improving liquidity & lending capacity
Banking and Economic reforms….improving liquidity & lending capacity Restoration of confidence in the Industry impacting positively on Deposit Money Banks Banks ROA and ROE likely to improve as considerations are made on divesting in non performing subsidiaries in the light of the discontinuance
Slide 10: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 10
Slide 11: Financial Highlights
Financial Highlights Key Robust income base Themes Positive Outlook for Q4’10 Sustained superior performance Gross Earnings: N139bn -13.62% YoY P&L Net Interest Income: N63bn +2.03% YoY Net Interest Margin: 4.23% -36.39%YoY PBT: N39bn +196.30% YoY Customer Deposit: N1.27trn +8.55% (YTD) Balance Tota
Slide 12: Profit & Loss Statement
Profit & Loss Statement Group Group 9 mths to 9 mths to YOY Sep-10 (N’m) Sep-09 (N’m) Change Gross Income 139,601 161,613 -13.62% Interest Income 92,283 109,891 -16.02% Interest Expense -29,122 -47,985 -39.31% Net Interest Income 63,161 61,906 2.03% Fees and Commission Income 30,971 28,710 7.88% For
Slide 13: Profitability boosted by the group's improved efficiency
...Profitability boosted by the group’s improved efficiency Gross Revenue PBT / PAT Cost Income Ratio Net Interest Margin 13
Slide 14: Revenue Base well diversified
Revenue Base....well diversified Q3 2010 Interest Income Q3 2009 Q3 2010 Non-Interest Income Q3 2009 14
Slide 15: Sustained cost reduction strategies yielding results
Sustained cost reduction strategies....yielding results Q3 2010 Interest Expenses Q3 2009 39.31% YoY drop in Interest Expense Q3 2010 Operating Expenses Q3 2009 8.14% YoY drop in Operating Expense 15
Slide 16: Balance Sheet - Assets
Balance Sheet - Assets Group Group Group Sep-10 (N’m) Dec-09 (N’m) Sep-09 (N’m) Cash and balances with central banks 80,847 126,779 86,422 Treasury bills 355,843 234,115 227,075 Due from other banks 322,142 341,830 457,947 Loans and advances 701,265 698,326 658,074 Advances under finance lease 10,52
Slide 17: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group Group Sep-10 (N’m) Dec-09 (N’m) Sep-09 (N’m) Customer deposits 1,278,010 1,173,917 1,090,090 Claims Payable 109 198 247 Liabilities on insurance contracts 2,144 1,202 945 Borrowings 30,661 35,984 30,079 Current income tax 5,551 7,407 2,348 Other liabil
Slide 18: Appropriately matched assets & liabilities with sufficient core deposit base
Appropriately matched assets & liabilities with sufficient core deposit base…to ensure safety and better returns Quarter on Quarter Loans and Advances Sept’10 Breakdown Quarter on Quarter Deposits Sept’10 Breakdown 18
Slide 19: Sustained strong liquidity and right funding mix
Sustained strong liquidity and right funding mix Sept’10 Liquid Assets Jun’10 Sept’10 Funding Mix Jun’10 19
Slide 20: Summary of Q3 2010 Performance
Summary of Q3 2010 Performance… Continued focus Continued focus on excellent Sustained superior Strong capital Appropriate Risk on improving customer services performance and base, liquidity and Management efficiency through well growth in capital adequacy Structure (reducing cost-to- motivated staf
Slide 21: Revenue - By Segment
Revenue - By Segment Gross Revenue by Segment Gross Revenue by Segment – Q3’10 * *•Comprises Registrars, Trustees and Pension Funds Corporate & Retail Banking still dominates the income stream of the group 21
Slide 22: Revenue - By Geography
Revenue - By Geography Gross Revenue by Geography Gross Revenue by Geography – Q3’10 Nigeria business activities account for over 90 percent of the group’s revenue 22
Slide 23: PBT - By Geography
PBT - By Geography PBT by Geography PBT by Geography – Q3’10 Nigeria continues to be the group’s main profitability driver 23
Slide 24: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 24
Slide 25: Robust risk Management structure sustained Risk Asset Quality
Robust risk Management structure..sustained Risk Asset Quality Loans/Provisions Conservative loan to deposit ratios…… Group Group Group Group providing sufficient room for future (N’m) Sep-10 June-10 Mar-10 Dec-09 expansions. Sustained low NPL ratios, highlighting the group’s robust risk management
Slide 26: Diversified Loan Portfolio across all Sectors
Diversified Loan Portfolio across all Sectors Loans by Sector – Sept’10 No concentration risk with no sector above 10% 26
Slide 27: Robust risk management approach to ensure cohesive oversight
Robust risk management approach....to ensure cohesive oversight and good corporate governance Enterprise risk management via top-down sectoral exposures…..aligning the Board’s decision with the bank’s risk philosophy and appetite. The composition of our loan by customer reinforces our business model
Slide 28: Effective Credit Risk Management Structure
Effective Credit Risk Management Structure Board – Credit Committee Credit Exception Committee Management Credit Committee Head, Credit Risk Management Loan Recovery Unit The Credit Risk Management Group Lending Groups (CRMG) provides high level centralized management of Credit Group Head of Lending
Slide 29: Strong Capitalization and liquidity key factors in our success
Strong Capitalization and liquidity…..key factors in our success Liquidity and Capital Adequacy Comfortable Capital Adequacy & Liquidity Ratios for the Bank – well above the regulatory and industry requirements. Capital Mix Consistently low leverage – capital base predominantly made up of tier 1 29
Slide 30: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 30
Slide 31: Our Strategy
….Our Strategy Our Vision Our Mission “.....build the Zenith brand into a reputable “....establish a presence in all major economic international financial institution recognised for and financial centres in Nigeria, Africa and indeed innovation, superior customer service and all over the world; cre
Slide 32: Outlook - Key Growth Target Areas
Outlook - Key Growth Target Areas Leverage on our huge capital and liquidity base to explore funding gap opportunities Sector existing in infrastructure, power, telecoms, etc sub-sectors Leverage on our brand image and explore business Business line & synergy to sustain & improve earnings from our G
Slide 33: Agenda
Agenda Company Overview Operating Environment Results Group By Segment By Geography Company Risk Management Strategy and Outlook Q&A 33
Slide 34: Q&A
Q&A 34