Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — H1 2022 Earnings Presentation
40 slides from Zenith Bank's earnings presentation, 2022
Slide 1: Investors & Analysts
amie KBE 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: Overview of Operating Environment
Overview of Operating Environment © 2022 ZENITH BANK PLC | First Half 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 Real GDP Growth: GDP Growth Rate Nigeria’s real GDP grew by 3.11% y/y in Q1 2022. While this is lower than the 3.98% GDP recorded in Q4 2021 by 0.87%, it however indicates the positive path of the economy for the 4.03% 3.98% 3.11% sixth c
Slide 6: Our Investment Proposition
Our Investment Proposition Market dominance in both corporate and retail space, formidable capital and liquidity buffer, strengthened ERM practices and excellent value creation for shareholders. A dominant player in the Nigerian banking industry: Controls a significant share of the high-end corpor
Slide 7: QR Banking
QR Banking © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts | Page 7
Slide 8: Non-financial Highlights
Non-financial Highlights © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts | Page 8
Slide 9: Non-financial Highlights
Non-financial Highlights Social Impact/ESG footprint Awards • State Governments’ Security Funds and Infrastructure Development. • Number One Bank in Nigeria by Tier-1 Capital • Private Sector Health Alliance Project 2022 – The Banker. • 2022 Microsoft office secured • Best Bank in Nigeria 2022 – Glo
Slide 10: Group Results
Group Results © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 11: Financial Highlights – H1 2022
Financial Highlights – H1 2022 Income Statement Balance Sheet Gross earnings: Customers’ deposits: N404.8Bn +17.1% YoY N7.15Tn +10.5% YtD Net-interest income: Gross loans: N184.7Bn +15.5% YoY N3.66Tn +4.6% YtD Non-interest income: N149.0Bn +17.5% YoY Total assets: N10.11Tn +7.1% YtD Profit before ta
Slide 12: Financial Highlights – H1 2022 Contd.
Financial Highlights – H1 2022 Contd. Key Ratios 30-Jun-22 30-Jun-21 % change Earnings per share (EPS) N3.55 N3.38 5.0% Return on average equity (RoAE) 17.5% 18.8% (6.9%) Return on average assets (RoAA) 2.3% 2.5% (8.0%) Net interest margin - NIM 7.1% 6.5% 9.2% Cost of funds 1.4% 1.3% (7.7%) Cost of
Slide 13: Profit or Loss Statement
Profit or Loss Statement • Strong bottom line, boosted by growth in non-interest income. Group Group YoY (N’million) 6M 22 6M 21 Change Gross income 404,763 345,559 17.1% Interest and similar income 241,726 203,934 18.5% Interest and similar expense (56,983) (43,994) 29.5% Net interest income 184,74
Slide 14: Consolidating on Earnings and Profitability
Consolidating on Earnings and Profitability Zenith Group continues to deliver Gross earnings (N’BN) attractive earnings profile, supported by diversified revenue base. 346 346 405 322 332 Gross earnings rose by a strong 17.1% YoY from NGN346 billion in H1 2021 to NGN405 billion in H1 2022. Jun 18
Slide 15: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. Net Interest Margin Net Interest Margin - NIM expanded from 6.5% in H1 2021 to 7.1% in H1 2022, demonstrating the group’s 10.1% ability to deliver optimal pricing on its interest- 8.6% 9.0% 6.5% 7.1% bearing assets and liabilities. Cost of Funds ro
Slide 16: Evolution of Revenue Base
Evolution of Revenue Base % to Total % to Total N'million H1 2022 H1 2021 YoY Revenue Revenue Interest income 241,726 59.7% 203,934 59.0% 18.5% • Contribution of non- interest income to total Trading income 85,192 21.1% 59,275 17.2% 43.7% revenue remained Fees and commissions income 78,500 19.4% 62,
Slide 17: Revenue Base: Interest Income Lines
Revenue Base: Interest Income Lines • Interest income grew by 18.5% YoY, driven by the elevated yield environment. Interest Income N'million H1 2022 H1 2021 YoY H1 2021 H1 2022 Loans and advances 163,414 135,426 20.7% Placement with Placement with banks & discount banks & discount Treasury bills 21,
Slide 18: Revenue Base: Non-Interest Income (NII) Diversification
Revenue Base: Non-Interest Income (NII) Diversification • The 17.5% growth in non-interest income was propelled by the 44.5% growth in fees on electronic products. Account H1 2022 H1 2021 maintenance Account Credit Fees on Credit N'million H1 2022 H1 2021 YoY fee/COT Other related fees maintenance r
Slide 19: Interest Expense Mix
Interest Expense Mix Interest Expenses H1 2022 Current Borrowed accounts 15.5% • Interest expense rose by 29.5% YoY as a result of funds 37.2% the elevated yield environment and growth in the Savings accounts funding base. 17.3% Time N'million H1 2022 H1 2021 YoY deposits 30.1% Current accounts 8,81
Slide 20: Continuous Efforts Towards Cost Optimisation
Continuous Efforts Towards Cost Optimisation. • Total operating expenses grew by 19% YoY, driven by increases in regulatory cost, technology cost and general inflationary pressures. Total Operating Expenses N'million H1 2022 H1 2021 YoY H1 2021 H1 2022 AMCON levy 44,010 37,920 16.1% Security & cash
Slide 21: Balance Sheet – Assets
Balance Sheet – Assets • Robust balance sheet - well positioned for growth opportunities. Group Group YTD Group (N ‘million) Jun-22 Dec-21 Change Jun-21 Cash and balances with central banks 1,630,361 1,488,363 9.5% 1,424,811 Treasury bills 2,084,241 1,764,945 18.1% 1,714,411 Assets pledged as collat
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 YTD Group Liabilities Jun-22 Dec-21 Change Jun-21 Customers deposits 7,152,964 6,472,054 10.5% 5,770,434 Derivative liabilities 9,251 1
Slide 23: Sustained Assets & Liabilities Match
Sustained Assets & Liabilities Match • Deposit base is predominantly current accounts with increasing savings account balance. Gross Loans Loans & Advances 3,705 3,662 H1 2022 FYE 2021 3,502 3,181 On-lending On-lending 2,992 Overdrafts facilities facilities 18.0% 12.5% 15.4% Overdrafts 12.6% N'bn Te
Slide 24: Strong Liquid Asset Base & Funding Mix
Continued Market Dominance - Strong Liquid Asset Base & Funding Mix • High quality and liquid balance sheet with diversified funding base. Liquid Assets H1 2022 FYE 2021 Investment N'million H1 2022 FYE 2021 YTD Investment securities Cash 97,683 84,077 16.2% securities 32.7% Due from Due from Operat
Slide 25: Risk Management
Risk Management © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 26: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio NPL Coverage Ratio Our Risk Management Strategy 128.5% 115.0% 112.4% 114.4% The Group adopts a complete and integrated approach to 97.3% risk management that is driven from the Board level to the operational activities of the bank. Risk management is practiced as a
Slide 27: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Diversified loan portfolio across sectors supports asset quality. Loans by Sector – H1 2022 Loans by Sector – FYE 2021 Communication Flour Mills Finance and Flour Mills 1.5% Finance and Communication 2.8% Insurance 2.0% Real Estate and Insuranc
Slide 28: NPL by Sectors
NPL by Sectors H1 2022 FYE 2021 General Commerce Agriculture General Commerce 23.68% 4.45% 22.75% Agriculture 4.35% Education Education 0.78% 0.30% Oil and Gas Oil and Gas 34.18% 32.03% Communication Communication 22.03% 23.15% Consumer Consumer Credit Credit Transportation 7.13% 8.00% Manufacturing
Slide 29: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans Cumulative Restructured Loans H1 2022 H1 2022 USD loans by % to US$ % to Gross US$' m N'm Restructured Loans % to Restructured % to Gross sector loans loans N'm by sector loans loans Oil and gas 1,695 714,295 51.8% 19.5% Oil and gas
Slide 30: Strong Capitalisation
Strong Capitalisation • Solid and high-quality capital position provides room for further growth. Liquidity & Capital Adequacy 69.9% 71.2% 70.2% 60.5% 52.9% Capital and liquidity ratios – well above regulatory requirements of 22.0% 20.1% 21.0% 22.1% 21.0% 30% for Liquidity and 15% for Capital Adequa
Slide 31: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 32: Performance – By Business Segments
Performance – By Business Segments • Contribution of retail segment to the Group’s gross revenue increased from 12.5% to 13.3% YoY Gross Revenue H1 2022 6 Months Ended June 2022 (N’million) Corporates Commercial/ 57.4% Public Corporates Public Retail Consolidated 8.4% SMEs Gross revenue 232,334 33,8
Slide 33: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments Gross Loans Total Deposit H1 2022 Gross Loans – N3.66 Trillion H1 2022 Total Deposits – N7.15 Trillion Corporates Commercial 23.5% & SMEs Commercial 19.0% & SMEs 36.8% Retail 4.7% Corporates 61.0% Public Public 10.1% 15.3% Retail 29.7% FYE 2021 Gross Loans – N
Slide 34: Electronic Banking Products Performance by Channels
Electronic Banking Products Performance by Channels. Value of Electronic Product Transactions Number of Electronic Product Transactions H1 2022 H1 2021 YoY H1 2022 H1 2021 YoY Total Number of Total Transaction 1,112 908 22.5% 49,512 39,358 25.8% Transactions (million) Value (N'bn) 373 20,109 22,386
Slide 35: Geographical Presence
Geographical Presence © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts | Page 35
Slide 36: Performance by Geography
Performance by Geography Total Revenue 6 Months Ended June 2022 (N’million) Nigeria Rest of Africa Europe Eliminations Consolidated H1 2022 Nigeria 87.4% Total revenue 367,878 38,822 14,160 (16,097) 404,763 Total expense (244,641) (23,406) (6,280) (431) (274,758) Profit before tax 123,237 15,416 7,8
Slide 37: Strategy & Outlook
Strategy & Outlook © 2022 ZENITH BANK PLC | First Half Group Results Presentation to Investors & Analysts
Slide 38: Strategies for Driving our Vision
Strategies for Driving our Vision 1 2 Attracting cost effective Adopting efficient digital Compete aggressively deposits from the retail end channels. for market share while of the market for Deliver superior Attracting talented people and deployment in the corporate service experience focusin
Slide 39: Guidance for FYE 2022
Guidance for FYE 2022 H1 2022 Achieved FYE 2022 Guidance FYE 2021 Achieved PBT N130.0Bn N294Bn N280Bn Effective Tax Rate 14.3% 15% 12.7% PAT N111.4Bn N250Bn N245Bn ROAE 17.5% 20% 20.4% ROAA 2.3% 2.5% 2.7% NIM 7.1% 7.2% 6.7% Cost of Funds 1.4% 2.0% 1.5% Cost of Risk 1.4% 2.0% 1.9% Cost to Income 57.8
Slide 40: 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