Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — FY2021 Earnings Presentation
42 slides from Zenith Bank's earnings presentation, Nov 6, 2022
Slide 1: 2021 Full Year Report: Presentation to Investors & Analysts
~ “SS | Za | 2021 FULL YEAR REPORT Presentation to Investors & Analysts PEO PLE TECHNOLOGY SERVICE
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: Operating Environment & Non-financial Highlights
Operating Environment & Non- financial Highlights © 2021 ZENITH BANK PLC | Full Year 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 3.98% y/y in Q4 2021, showing a sustained positive growth for the fifth quarter since the 2020 recession. However, it was 0.05% lower than the 4.03% 5.01% 4.03% 3.98% growth reco
Slide 6: Nigerian Economy and Key Developments in the Banking Sector
Nigerian Economy and Key Developments in the Banking Sector Launch of new forex repatriation scheme “Race to US$200 billion in FX Repatriation (RT200FX) Program”. It is a set of policies and program issued to enable Nigeria achieve the goal of US$200 billion in FX repatriation over the next 3-5 ye
Slide 7: 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 8: Awards
QR Banking Awards © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 8
Slide 9: Non-financial Highlights
Non-financial Highlights © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 9
Slide 10: Non-financial Highlights
Non-financial Highlights Social Impact/CSR Awards • Most Valuable Banking Brand in Nigeria 2021 – The • State Governments’ Security Banker. Funds And Infrastructure • Number One Bank in Nigeria by Tier-1 Capital 2021 – • Private Sector Health Alliance The Banker. Project • Best Bank in Nigeria 2021
Slide 11: Group Results
Group Results © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 12: Financial Highlights – FYE 2021
Financial Highlights – FYE 2021 Income Statement Balance Sheet Gross earnings: Customers’ deposits: N765.6Bn +10% YoY N6.47Tn +21% YoY Net-interest income: Gross loans: N320.8Bn +7% YoY N3.50Tn +20% YoY Non-interest income: Total assets: N309.0Bn +23% YoY N9.45Tn +11% YoY Profit before tax: Total sh
Slide 13: Financial Highlights – FYE 2021 Contd. Key Ratios
Financial Highlights – FYE 2021 Contd. Key Ratios 31-Dec-21 31-Dec-20 % change Earnings per share (EPS) N7.78 N7.34 6% Return on average equity (RoAE) 20.4% 22.4% (9%) Return on average assets (RoAA) 2.7% 3.1% (12%) Net interest margin - NIM 6.7% 7.9% (15%) Cost of funds 1.5% 2.1% (28%) Cost of risk
Slide 14: Profit or Loss Statement
Profit or Loss Statement • Strong bottom line, boosted by strong growth in fees & commission income, trading income and reduction in funding cost. Group Group YoY (N’million) 2021 2020 Change Gross earnings 765,558 696,450 10% Interest and similar income 427,597 420,813 2% Interest and similar expen
Slide 15: Consolidating Earnings and Profitability
Consolidating Earnings and Profitability 280 Zenith Group continues to deliver PBT (N’Bn) 243 256 attractive earnings profile, supported 204 232 by robust revenue base. PBT increased by 10% YoY from N255.9bn in 2020 to N280.3bn in 2021 as the Group continues to strengthen its non-interest revenue
Slide 16: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. Cost of Funds & Net Interest Margin Net Interest Margin - NIM contracted from 7.9% in 2020 to 6.7% in 2021 due to lower yields on HTM investment 8.9% 8.9% 8.2% 7.9% 6.7% securities. 5.2% 3.1% 3.0% Cost of Funds declined to 1.5% in 2021 from 2.1% 2.
Slide 17: Evolution of Revenue Base
Evolution of Revenue Base % to Total % to Total N'million 2021 2020 YoY Revenue Revenue • Contribution of non- Interest income 427,597 55.9% 420,813 60.4% 1.6% interest income to total revenue increased from Trading income 167,483 21.9% 121,678 17.5% 37.6% 39.6% in FYE 2020 to Fees and commissions i
Slide 18: Revenue Base: Interest Income Lines
Revenue Base: Interest Income Lines • Interest income increased by 2% YoY, driven mainly by the expansion in loan books. Interest Income FYE 2021 FYE 2020 N'million 2021 2020 YoY Placement with banks & discount Placement Loans and advances 292,224 250,812 17% houses with banks & Government 6.3% Othe
Slide 19: Revenue Base: Non-Interest Income Diversification
Revenue Base: Non-Interest Income (NII) Diversification • Non-interest income increased by 23% YoY as impressive growths were recorded across almost all lines of income. N'million 2021 2020 YoY 2021 2020 Fees on electronic products 37,470 27,078 38% Fees on Fees on electronic Credit related Account
Slide 20: Interest Expense: Funding Cost Optimization
Interest Expense: Funding Cost Optimization Interest Expenses 2021 Current Time accounts deposits 9.1% Savings • Interest expense declined by 12% YoY as a result 27.5% of the strategic rebalancing of our funding base. accounts 15.6% Borrowed funds and N'million 2021 2020 YoY lease 47.8% Current acco
Slide 21: Continuous Efforts Towards Cost Optimisation
Continuous Efforts Towards Cost Optimisation. • Total operating expense grew by 13% YoY due to inflationary pressures, exchange rate movement and heightened regulatory costs. Total Operating Expenses N'million 2021 2020 YoY 2020 2021 NDIC Security & cash Personnel expenses 79,885 79,520 0% Depreciat
Slide 22: Balance Sheet – Assets
Balance Sheet – Assets • Robust balance sheet - well positioned for growth opportunities as the economy continues to recover. Group Group YoY (N‘million) Dec 21 Dec 20 Change Cash and balances with central bank 1,488,363 1,591,768 (7% )Treasury bills 1,764,945 1,577,875 12% Assets pledged as collate
Slide 23: 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 YoY Liabilities Dec-21 Dec-20 Change Customers deposits 6,472,054 5,339,911 21% Derivative liabilities 14,674 11,076 33% Current income
Slide 24: Sustained Assets & Liabilities Match
Sustained Assets & Liabilities Match • The 21% growth in customers’ deposits in 2021 is a reflection of the increasing confidence in the Zenith brand. • Gross loans grew 20% YoY propelled by both corporate and retail lending activities. Gross Loans Loans & Advances 3,502 FYE 2021 FYE 2020 2,919 Over
Slide 25: Strong Liquid Asset Base & Funding Mix
Continued Market Dominance - Strong Liquid Asset Base & Funding Mix • High quality balance sheet with diversified funding sources. Liquid Assets FYE 2021 FYE 2020 N'million 2021 2020 YoY Debt securities Due from Cash 84,077 104,544 -20% Debt securities 31.8% Due from other 26.3% other banks Operatin
Slide 26: Risk Management
Risk Management © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 27: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio NPL Coverage Ratio Our Risk Management Strategy The Group adopts a complete and integrated approach to 192.4% risk management that is driven from the Board level to the 143.4% 148.2% operational activities of the bank. 113.9% 114.4% Risk management is practiced as a
Slide 28: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Well diversified loan portfolio across sectors supports asset quality. Loans by Sector – FYE 2021 Loans by Sector – FYE 2020 Flour Mills Communication Flour Mills Communication Finance and 2.8% 1.7% 3.7% 4.1% Transportation Insurance Real Estat
Slide 29: NPL by Sectors
NPL by Sectors FYE 2021 FYE 2020 General Commerce General Commerce 22.75% Agriculture 24.70% Agriculture 4.35% 4.44% Education 0.30% Oil and Gas Education 1.27% 29.87% Oil and Gas Communication 34.18% 22.03% Communication Consumer 24.27% Credit Consumer Transportation 6.27% Credit 0.55% 8.00% Manufa
Slide 30: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans Cumulative Restructured Loans FYE 2021 FYE 2021 % to % to Restructured % to % to USD loans US$' m N'm US$ Gross Loans by N'm Restructured Gross Public Others by sector loans loans Others sector loans loans 14.7% 4.0% 21.9% Oil and ga
Slide 31: Strong Capitalisation
Strong Capitalisation • Solid and high-quality capital position provides room for further growth. Liquidity & Capital Adequacy 80.9% 69.7% 66.2% 71.6% 57.3% Capital and liquidity ratios – well 27.0% 25.0% 22.0% 23.0% 21.0% above regulatory requirements of 30% for Liquidity and 15% for Capital Adequa
Slide 32: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 33: Performance – By Business Segments
Performance – By Business Segments • Continuous diversification and improved profitability across core business segments. Gross Revenue 2021 FY 2021 (N’million) Corporates Commercial/ 56.7% Public Corporates Public Retail Consolidated 8.6% SMEs Gross revenue 434,251 65,838 169,432 96,037 765,558 Com
Slide 34: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments Gross Loans Total Deposit FYE 2021 Gross Loans – N3.50 Trillion FYE 2021 Total Deposits – N6.47 Trillion Commercial Corporates & SMEs 22.3% 18.7% Commercial & SMEs Retail 39.1% 5.7% Corporates Public 61.1% 9.8% Public 14.5% Retail 28.8% FYE 2020 Gross Loans –
Slide 35: Electronic Banking Products Performance by Channels
Electronic Banking Products Performance by Channels. Value of Electronic Product Transactions Number of Electronic Product Transactions FYE 2021 FYE 2020 YoY FYE 2021 FYE 2020 YoY Total Transaction Total Number of 85,008 49,175 73% 1,953 1,156 69% Value (N'bn) Transactions (million) 37,837 576 580 3
Slide 36: Geographical Presence
Geographical Presence © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 36
Slide 37: Performance by Geography
Performance by Geography • Foreign subsidiaries contributed 12% of total revenue. Total Revenue 12 Months Ended December 2021 (N’million) Nigeria Nigeria Rest of Africa Europe Eliminations Consolidated 2021 88.0% Total Revenue 688,162 74,697 19,315 (16,616) 765,558 Total expense (422,253) (47,451) (
Slide 38: Strategy & Outlook
Strategy & Outlook © 2021 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 39: 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 40: Our Key Growth Target Sectors
Our Key Growth Target Sectors Driving Profitability with our Competitive Advantages Identified Growth Sectors Competitive Advantage Retail/SMEs Strong capital and liquidity Agriculture Strong brand Healthcare/Pharmaceuticals Robust risk management framework Infrastructure Extensive b
Slide 41: Guidance for FYE 2022
Guidance for FYE 2022 FYE 2021 Guidance FYE 2021 Achieved FYE 2022 Guidance PBT N270Bn N280Bn N294Bn Effective Tax Rate 13.0% 12.7% 15% PAT N235Bn N245Bn N250Bn ROAE 23.0% 20.4% 20% ROAA 3.2% 2.7 % 2.5% NIM 8.0% 6.7% 7.2% Cost of Funds 2.0% 1.5% 2.0% Cost of Risk 2.0% 1.9% 2.0% Cost to Income 48.0%
Slide 42: 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