Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — H1 2015 Earnings Presentation
28 slides from Zenith Bank's earnings presentation, June 2015
Slide 1: H1 2015 Group Results Presentation to Investors & Analysts
H1 2015 Group Results Presentation to Investors & Analysts June 2015 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): Key GDP grew at the rate of 3.96% y/y in Q1 2015, down by 225bps from 6.21% Theme recorded in the corresponding quarter of previous fiscal year. The non-oil sector was the major driver of the growth recorded in
Slide 5: New CBN Circulars and Other Directives
New CBN Circulars and Other Directives Limit on Foreign Currency The Central Bank has placed a limit on foreign currency borrowings by banks to 75% of Borrowings shareholders’ funds. BASEL II Implementation A revised guideline on BASEL II implementation covering Pillar 1 (minimum capital Update requ
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 Marching towards exceptional performance in 2015 Theme Gross Earnings: N229.08bn +24.21% YoY Net Interest Income: N112.64bn +14.23% YoY P&L Net Interest Margin: 8.3% +2.5% YoY PBT: N72.20bn +24.79% YoY PAT: N53.18bn +12.09% YoY Customer Deposit: N2.60tn +2.66% YTD Balance To
Slide 9: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 6 mths to 6 mths to YOY Jun-15 Jun-14 Change Gross Income 229,082 184,435 24.21% Continuing Operations: Interest and similar income 176,223 147,387 19.56% Interest and similar expense -63,585 -48,781 30.35% Net interest income 112,638 98,606 14.23% Impairmen
Slide 10: Consolidating earnings and profitability
Consolidating earnings and profitability... Comments Net Interest Margin Net Interest Margin (NIM) increased YoY by 2.5% (from 8.1% in H1 2014 to 8.3% in H1 2015) while it grew significantly by 33% QoQ as the group continues to deploy its resources optimally. Cost-to-Income Ratio declined YoY by
Slide 11: Revenue Base …Sustained Diversification
Revenue Base …Sustained Diversification Interest Income H1 2014 H1 2015 N'million H1 2015 H1 2014 YoY PBT Interbank Placements 5,156 2,334 121% Treasury Bills 27,540 30,201 -9% Govt & Other Bonds 14,218 17,360 -18% Loans & Advances 129,309 97,492 33% Total 176,223 147,387 20% Interest income from
Slide 12: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. H1 2015 Interest Expenses H1 2014 N'million H1 2015 H1 2014 YoY Current accounts 2,504 2,018 24% Savings accounts 5,364 2,449 119% Time Deposits 49,623 39,551 25% Interbank takings 762 2,457 -69% Borrowed funds 5,332 2,306 131% Total 63,585 48,781
Slide 13: Balance Sheet - Assets
Balance Sheet- Assets Group Group YTD Group (N'm) Jun-15 Dec-14 Change Jun-14 Cash and balances with central banks 634,972 752,580 -15.63% 556,416 Treasury bills 287,989 295,397 -2.51% 317,458 Assets pledged as collateral 239,078 151,746 57.55% 83,089 Due from other banks 499,093 506,568 -1.48% 501,
Slide 14: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YTD Group (N'm) Jun-15 Dec-14 Change Jun-14 Customers deposits 2,604,804 2,537,311 2.66% 2,304,976 Derivative liabilities 697 6,073 -88.52% - Current income tax 5,958 10,042 -40.67% 2,171 Deferred income tax liabilities 23 - - 1,106 Other liabilities 2
Slide 15: Sustained assets & liabilities match
Sustained assets & liabilities match…... Loans Growth Loans & Advances H1 2014 H1 2015 Deposits Growth Deposits Mix H1 2015 H1 2014 15
Slide 16: Liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… H1 2014 H1 2015 Liquid Assets N'million H1 2015 H1 2014 YoY Cash 43,843 50,880 -14% Operating accounts with CBN 43,162 53,937 -20% Treasury bills 287,989 317,458 -9% Assets pledged as collateral 239,078 83,089 188% Current
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue 6 Months Ended Jun 2015 Rest of H1 2015 Nigeria Europe Eliminations Consolidated (N’m) Africa Total Revenue 216,999 13,471 5,889 -7,277 229,082 Share of profit of Associates - - - 206 206 Total Expense -146,212 -9,168 -5,025 3,318 -157,087 Profit Before Tax 70,787 4,
Slide 18: P&L – By Sector
P&L – By Sector Gross Revenue 6 Months Ended H1 2015 Corporate Institutional Public Retail Consolidated Jun 2015 (N’m) Total Revenue 120,260 30,394 25,134 53,294 229,082 Total Expenses -70,338 -28,070 -18,134 -40,339 -156,881 Profit Before Tax 49,922 2,325 7,000 12,955 72,201 Tax -13,152 -612 -1,844
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector H1 2015 Total Deposits - N2.60tn H1 2014 Total Deposits - N2.30tn H1 2015 Gross Loans - N1.94tn H1 2014 Gross Loans - N1.41tn 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 – H1 2015 Loans by Sector – H1 2014 o Gross Loans – N1.94tn o Gross Loans – N1.49tn Well Diversified Loan Portfolio 21
Slide 22: NPL by Sectors
NPL by Sectors H1 2015 H1 2014 o Total NPLs – N27.92bn o Total NPLs – N39.59bn o NPL Ratio – 1.4% o NPL Ratio – 2.8% o We continue to develop our Risk Management Strategy and improve on the quality of our loan portfolio. o Overall NPL ratio of 1.4% 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. 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 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 FY2015
Outlook and Prospects for FY2015 Retail Banking: The bank has tremendously grown its retail Customer Services : At the center of the Group’s pursuit of business especially in liability generation. This has been excellent customer service, we would continue to focus on achieved through mobile ban
Slide 27: Guidance for FYE 2015
Guidance for FYE 2015 FYE 2014 FYE 2015 H1 2015 Comments: Achieved Projection Achievement *Effective Tax Rate: The noted increase in effective tax rate to 26% as at 30 June 2015 was the Capital Adequacy 20.00% 20.00% 20.00% impact of the excess dividend tax of N11.4bn which was already ROAE 18.70% 2
Slide 28: Thank you
Q&A Thank you 32