Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — Q1 2014 Earnings Presentation
30 slides from Zenith Bank's earnings presentation, March 2014
Slide 1: Q1 2014 Group Results
Q1 2014 Group Results Presentation to Investors & Analysts Click to edit Master title style IFRS Compliant Results March 2014 Click to edit Master subtitle style people | technology | service ZENITH BANK PLC people | technology | service
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 Godwin Emefiele Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Peter Amangbo Sli
Slide 4: The Nigerian Economy
The Nigerian Economy … GDP Growth: The GDP grew at the rate of 7.67% y/y in Q4 2013, up by 68bps from 6.99% Key recorded in the corresponding quarter of the previous fiscal year. The non-oil sector was the major driver of the growth recorded in Q4 2013; this Theme includes activities recorded in
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 Theme Listing on London Exchange: Zenith Bank has listed a non-capital raising GDR on the London Stock Exchange
Slide 6: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Peter Amangbo Sli
Slide 7: Financial Highlights
Financial Highlights Key On Course for an Impressive Performance in 2014 Theme Gross Earnings: N94.32bn +8.45% YoY Net Interest Income: N45.54bn -0.15% YoY Net Interest Margin: 8.02% -8.57% YoY P&L PBT: N28.91bn +0.14% YoY PAT: N23.68bn +1.15% YoY Customer Deposit: N2.29tn +0.50% (YTD) Balance Total
Slide 8: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 3 mths to 3 mths to YOY Mar-14 Mar-13 Change Gross Income 94,324 86,977 8.45% Continuing Operations: Interest Income 71,435 65,534 9.00% Interest Expense -25,893 -19,924 29.96% Net Interest Income 45,542 45,610 -0.15% Impairment Charge for Credit Losses -1,9
Slide 9: Strengthening earnings and profitability
Strengthening earnings and profitability... Comments Consistently high Net Interest Margin Net Interest Margin (NIM) remained relatively high at 8.02% but declined as a result of increase in CRR for private sector deposits from 12% to 15%. (CRR for public funds maintained at 75%) Cost to Income
Slide 10: Revenue Base Sustained Diversification
Revenue Base …Sustained Diversification Q1 2014 Q1 2013 Interest Income N'million Q1 2014 Q1 2013 YoY PBT Interbank Placements 1,313 1,356 -3% T-Bills & Inv. Securities 18,986 24,083 -21% Govt & Other Bonds 8,883 7,046 26% Loans & Advances 42,253 33,049 28% Total 71,435 65,534 9% - Interest income f
Slide 11: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. Q1 2014 Interest Expenses Q1 2013 N'million Q1 2014 Q1 2013 YoY Current accounts 1,023 1,174 -13% Savings accounts 1,208 473 155% Time deposits 21,719 17,824 22% Inter-bank takings 1,298 287 352% Borrowed funds 645 166 289% Total 25,893 19,924 30%
Slide 12: Balance Sheet - Assets
Balance Sheet- Assets Group Group YOY Group (N'm) Mar-14 Dec-13 Change Mar-13 Cash and balances with central banks 586,747 603,851 -2.83% 317,003 Treasury bills 509,065 586,441 -13.19% 727,990 Due from other banks 357,002 256,729 39.06% 205,751 Loans and advances 1,310,020 1,251,355 4.69% 1,099,327
Slide 13: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YOY Group (N'm) Mar-14 Dec-13 Change Mar-13 Customers deposits 2,288,146 2,276,755 0.50% 1,994,650 Current income tax 12,059 7,017 71.86% 11,152 Deferred income tax liabilities 678 678 0.00% 5,584 Other liabilities 229,009 215,643 6.20% 175,509 On-lend
Slide 14: Sustained assets & liabilities match
Sustained assets & liabilities match…... Loans Growth Loans & Advances Q1 2013 Q1 2014 Q1 2014 Q1 2013 Deposits Growth Deposits Mix 14
Slide 15: Liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… Q1 2014 Q1 2013 Liquid Assets N'million Q1 2014 Q1 2013 YoY Cash 86,107 32,915 162% Operating accounts with CBN 71,264 95,041 -25% Mandatory reserve deposits with CBN 429,376 189,047 127% Treasury bills 509,065 727,990 -30%
Slide 16: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Peter Amangbo Sli
Slide 17: P&L - By Geography
P&L – By Geography Gross Revenue 3 Months Ended Rest of Nigeria Europe Eliminations Consolidated Mar 2014 (N’m) Africa Q1 2014 Total Revenue 92,809 7,306 2,646 -8,616 94,145 Share of profit of - - - - 180 Associates Total Expense -61,584 -3,787 -1,945 1,910 -65,406 Profit Before Tax 31,405 3,519 701
Slide 18: P&L - By Sector
P&L – By Sector Discontinued Consolidated Corporate Institutional Public Retail Operations 3 Months Ended Mar 2014 (N’m) Total Revenue 45,190 13,180 12,239 23,536 0 94,145 Total Expenses -30,004 -11,088 -6,523 -17,611 0 -65,226 Profit Before Tax 15,186 2,092 5,716 5,925 0 28,919 Tax -2,569 -786 -786
Slide 19: Deposits & Loans - By Sector
Deposits & Loans – By Sector Q1 2014 Total Deposits - N2.29tn Q1 2014 Gross Loans - N1.34tn 19
Slide 20: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Peter Amangbo Sli
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 – Q1 2014 Loans by Sector – Q1 2013 o Gross Loans – N1.34tn o Gross Loans – N1.13tn No concentration risk 22
Slide 23: NPL by Segment
NPL by Segment Q1 2014 Q1 2013 o Total NPLs – N37.15bn o Total NPLs – N33.46bn o NPL Ratio – 2.8% o NPL Ratio – 3% 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 – predominantly made up of Tier 1 (core capital) which consists of mainly share capital and reserves created by appropriations of
Slide 25: Agenda
Agenda Overview & Operating Environment Speaker: Managing Director/Chief Executive Officer Godwin Emefiele Slides 4 - 5 Results - Group Speaker: Chief Financial Officer Stanley Amuchie Slides 7- 15 Results – By Segment & Geography Speaker: Executive Director/Corporate Banking Peter Amangbo Sli
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 Mobile Banking: In a bid to encourage and promote person- Agriculture: The Federal government’s resolve to boost the agricultural sector in the country would no doubt create quite to-person payments and leverage on mobile phone channels as a number of opportuniti
Slide 29: Outlook and Prospects
Outlook and Prospects for FY2013 Representative Office: We have officially opened a Deposit Base: Our drive for low cost and appropriately representative office in Beijing, the capital city of the Peoples mixed deposit base to fund our credit and money market Republic of China. The group is cert
Slide 30: Thank you
Q&A Thank you 32