Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — H1 2011 Earnings Presentation
33 slides from Zenith Bank's earnings presentation, Jul 21, 2011
Slide 1: Zenith Bank Plc Group Results for 6 Months Ended June 30, 2011
ZENITH BANK PLC GROUP RESULTS For 6 Months Ended June 30, 2011 Presentation to Analysts and Investors Thursday July 21, 2011
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 Stanley Amuchie– DGM/Enterprise and Risk Management 3
Slide 4: Agenda
Agenda Operating Environment Results P&L Group Balance By Segment Sheet By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 4
Slide 5: The Nigerian Economy
The Nigerian Economy … Key GDP Growth: The Nigerian economy recorded a growth Foreign Reserves: The external reserves stood at S31.7bn at of 7.93% in H1 2011 compared to Q1 2011’s figure of Theme the end of first half of this year, representing a year-to-date 7.43%. Increased crude oil production an
Slide 6: The Banking Industry: significant events
The Banking Industry….significant events AMCON: Overall, the Asset Management Corporation of Rescission of ATM Policy: The rescission of the off-site ATM Nigeria (AMCON) has sold bond worth N1.7tn ($11bn) to policy by apex bank recently due to the need to promote the Key absorb and clean up bad loan
Slide 7: Agenda
Agenda Operating Environment Results P&L Group By Segment By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 7
Slide 8: Financial Highlights
Financial Highlights Key Sustained strong growth trajectory in both top and bottom line income Themes Key Themes Sustained robust and liquid capital and balance sheet base Well positioned for growth Gross earnings: N123bn +26.8% YoY P&L Net Interest Income: N61bn +52.2% YoY P&L Net Interest Margin:
Slide 9: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 6 mths to 6 mths to YOY June-11 June-10 Change Gross Income 122,839 96,850 26.83% Interest Income 78,288 63,827 22.66% Interest Expense 16,691 23,352 -28.52% Net Interest Income 61,597 40,475 52.19% Fees and Commission Income 29,831 20,964 42.30% Foreign Exc
Slide 10: Strong and Improving Bottom Line
Strong and Improving Bottom Line... PBT / PAT Bottom line income boosted by improved NIM and reduced funding cost despite increasing operating expenses fuelled by AMCON provisions and inflationary trends Cost Income Ratio Net Interest Margin 10
Slide 11: Improved revenue driven by increased treasury activities & transaction volumes
Improved revenue.... driven by increased treasury activities & transaction volumes H1 2011 Interest Income H1 2010 H1 2011 Non-Interest Income H1 2010 11
Slide 12: Cost management measures yielding results
Cost management measures yielding results H1 2011 Interest Expenses H1 2010 Interest expense reduced 28.5% YoY despite 12.4% increase in deposit liabilities H1 2011 Operating Expenses H1 2010 Operating expense increased 37% YoY driven by mandatory provisions 12
Slide 13: Balance Sheet - Assets
Balance Sheet - Assets Group Group Group (N'm) June-11 Dec - 10 June-10 Cash and balances with central banks 127,013 141,724 145,824 Treasury bills 359,788 298,869 358,813 Due from other banks 347,249 399,503 286,024 Loans and advances 793,874 713,285 667,633 On-lending facilities 36,695 22,536 - Ad
Slide 14: Balance Sheet - Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group Group (N’m) June-11 Dec-10 June-10 Customer deposits 1,445,508 1,318,072 1,285,538 Claims Payable 218 218 125 Liabilities on insurance contracts 2,811 2,287 2,392 On-lending facilities 40,164 26,049 - Borrowings 23,795 27,975 43,016 Current income tax
Slide 15: Sustained assets & liabilities match
Sustained assets & liabilities match Loan Growth Loans & Advances H1 2011 The slight drop in the loans in H1 2011 was due to our NPL sale to AMCON Deposits Deposit Mix H1 2011 Branch Network up Deposit volumes (12.3% YoY growth H1 2011 recorded)k and E-Banking Channels driving 15
Slide 16: Sustained strong liquidity and right funding mix
Sustained strong liquidity and right funding mix H1 2011 Liquid Assets H1 2010 H1 2011 Funding Mix H1 2010 16
Slide 17: Agenda
Agenda Operating Environment Results P&L Group Balance By Segment Sheet By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 17
Slide 18: P&L – By Segment
P&L – By Segment Investment General Corporate & Mgmt & Health & Life 6 Months Ended June 2011 (N’m) Retail Banking Stockbroking Insurance Others Eliminations Consolidated Total Revenue 113,787 2,188 6,265 1,746 -1,147 122,839 Operating Expenses 83,898 248 4,745 49 -1,147 87,793 Profit Before Tax 29,
Slide 19: P&L – By Segment
P&L – By Segment H1 2011 H1 2010 Gross Revenue PBT Our Corporate and Retail Banking segments still account for over 91% of the Group’s income stream … 19
Slide 20: Agenda
Agenda Operating Environment Results P&L Group Balance By Segment Sheet By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 20
Slide 21: P&L – By Geography
P&L – By Geography 6 Months Ended June 2011 (N’m) Nigeria Rest of Africa Europe Eliminations Consolidated Total Revenue 116,193 6,145 1,649 -1,148 122,839 Operating Expenses 82,840 5,048 1,052 -1,147 87,793 Profit Before Tax 33,353 1,097 597 -1.0 35,046 Tax -4,015 -204 -160 - -4,380 Profit After Tax
Slide 22: P&L – By Geography
P&L – By Geography H1 2011 H1 2010 Gross Revenue PBT Business from Nigeria continues to account for a substantial portion of the Group’s revenue base 22
Slide 23: Agenda
Agenda Operating Environment Results P&L Group Balance By Segment Sheet By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 23
Slide 24: Sustained Risk Asset Quality
Sustained Risk Asset Quality Highlights Coverage Ratio Loan to deposit ratio remains flat despite improved lending activities due to commensurate increase in deposit liabilities NPL ratio down to 3.3%, from 5.4% as at Q1’11. Improvement in NPLs driven mainly by the Bank’s recoveries in H1 2011 a
Slide 25: Maintaining our robust risk management culture
Maintaining our robust risk management culture Continuing to identify all risk exposures, threats and opportunities which are then managed with appropriate processes in line with best practice and “Adequacy and appropriateness regulatory requirements; remain our focal point in the constant reviews
Slide 26: Loan Portfolio
Loan Portfolio Loans by Sector – June’11 Adequately diversified across all sectors 26
Slide 27: Growth ambitions supported by strong liquidity and capital position
Growth ambitions supported by strong liquidity and capital position 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
Slide 28: Agenda
Agenda Operating Environment Results P&L Group By Segment By Geography Key Ratios Company Risk Management Strategy and Outlook Operational Highlights Q&A 28
Slide 29: Strategies for driving our vision
Strategies for driving our vision 1 The Bank focuses on cost 2 The Bank accomplishes this effective deposits from the strategy by: Compete retail end of the market to lend Consistent focus and aggressively for to the corporate end with Delivering superior investment in attracting and market sh
Slide 30: Creating quality and robust business models
Creating quality and robust business models Aggressive growth driven by a focus on quality and robust business models Sector Business Segments Business Model Operational Efficiency & Business line & Innovation Geography Large Corporate MNC Prompt service delivery Process review and realignment Fin
Slide 31: 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 Manufacturing Strong capital and liquidity Strong brand Oil and Gas (Upstream & Strong international rating Downstrea
Slide 32: Our Growth Horizon: A Sustainable Pace
Our Growth Horizon…… A Sustainable Pace Short Term Medium Term Long Term • Efficient and robust risk • Identifying all risk exposures, • Strengthen our institutional brand management structure driving down threats and opportunities which are by focusing on best banking NPL ratios then managed throug
Slide 33: Q&A
Q&A 33