Slide 1: FY 2015 Group Results Presentation to Investors & Analysts
FY 2015 Group Results Presentation to Investors & Analysts December 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): GDP grew at the rate of 2.11% y/y in Q4 2015, down by 383bps from 5.94% recorded in the corresponding quarter of previous fiscal year. Key Headline Inflation: Theme Headline Inflation increased to 9.6% y/y in
Slide 5: New CBN Circulars and Other Directives
New CBN Circulars and Other Directives General Loan Loss Provisions The Central Bank of Nigeria has increased the General Loan Loss Provision (GLLP) for performing loans from 1% to 2% BASEL II Implementation A revised guideline on BASEL II implementation covering Pillar 1 (minimum capital Update req
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 Efficiency and Risk Management for Superior Performance Theme Building A Shock-Proof Balance Sheet Gross Earnings: N432.5bn +7.2% YoY Net Interest Income: N224.6bn +8.8% YoY P&L Net Interest Margin: 8.1% -3.6% YoY PBT: N125.62bn +4.9% YoY PAT: N105.67bn +6.3% YoY Customer De
Slide 9: Profit & Loss Statement
Profit & Loss Statement Group Group (N’m) 12 mths to 12 mths to YOY Dec-15 Dec-14 Change Gross Earnings 432,535 403,343 7.24% Continuing Operations: Interest Income 348,179 313,422 11.09% Interest Expense -123,597 -106,919 15.60% Net Interest Income 224,582 206,503 8.75% Impairment Charge for Financ
Slide 10: Consolidating earnings and profitability...
Consolidating earnings and profitability... Comments Net Interest Margin Net Interest Margin (NIM) declined YoY by 3.6% (from 8.4% in 2014 to 8.1% in 2015) as yields on government securities dropped during 2015 financial year. Despite the tough operating environment, Cost-to-Income Ratio declined
Slide 11: Revenue Base ...Sustained Diversification
Revenue Base …Sustained Diversification Interest Income 2014 2015 N'million 2015 2014 YoY PBT Inter-bank Placements 6,232 10,026 -38% Treasury Bills 51,809 56,463 -8% Government Bonds 34,998 31,997 9% Derivative held for risk mgt - 1,972 -100% Loans & Advances 255,140 212,964 20% Total 348,179 313,4
Slide 12: Continuous efforts in cost-reduction strategies
Continuous efforts in cost-reduction strategies ….. 2015 Interest Expenses 2014 N'million 2015 2014 YoY Current accounts 4,638 4,020 15% Savings accounts 10,771 6,183 74% Time deposits 90,591 85,156 6% Borrowed funds 17,597 11,560 52% Total 123,597 106,919 16% Interest expense was up by 16% YoY as
Slide 13: Balance Sheet- Assets
Balance Sheet- Assets Group Group YOY (N'm) Dec-15 Dec-14 Change Cash and balances with central banks 761,561 752,580 1.19% Treasury bills 377,928 295,397 27.94% Assets Pledged as collateral 265,051 151,746 74.67% Due from other banks 272,194 506,568 -46.27% Derivative assets 8,481 17,408 -51.28% Lo
Slide 14: Balance Sheet- Liabilities & Equity
Balance Sheet- Liabilities & Equity Group Group YOY (N'm) Dec-15 Dec-14 Change Customers deposits 2,557,884 2,537,311 0.81% Derivative Liabilities 384 6,073 -93.68% Current income tax payable 3,579 10,042 -64.36% Deferred income tax liabilities 19 - - Other liabilities 205,062 289,858 -29.25% On-len
Slide 15: Sustained assets & liabilities match...
Sustained assets & liabilities match…... Loans & Advances Loan Growth 2015 2014 Deposit Mix Deposit Growth 2015 2014 15
Slide 16: Continued market dominance through strong liquid asset base and funding mix
Continued market dominance through strong liquid asset base and funding mix… 2015 Liquid Assets 2014 N'million 2015 2014 YoY Cash 41,649 70,084 -41% Operating accounts with CBN 316,358 174,350 81% Treasury bills 377,928 295,397 28% Assets pledged as collateral 265,051 151,746 75% Due from other bank
Slide 17: P&L – By Geography
P&L – By Geography Gross Revenue 12 Months Ended Dec 2015 Nigeria Rest of Africa Europe Eliminations Consolidated 2015 (N’m) Total Revenue 403,658 27,147 10,686 -8,956 432,535 Share of profit of - - - 228 228 Associates Total Expense -282,338 -20,528 -9,279 4,998 -307,147 Profit Before Tax 121,320 6
Slide 18: P&L – By Sector
P&L – By Sector Gross Revenue 12 Months Ended Corporate Institutional Public Retail Consolidated Dec 2015 (N’m) 2015 Total Revenue 224,508 59,443 34,642 113,942 432,535 Total Expenses -159,567 -44,561 -24,730 -78,061 -306,919 Profit Before Tax 64,941 14,882 9,911 35,882 125,616 Tax -10,315 -2,364 -1
Slide 19: Deposits & Loans – By Sector
Deposits & Loans – By Sector 2015 Total Deposits - N2.56tn 2014 Total Deposits - N2.54tn Retail 12.84% Retail 6.92% Public Public 8.17% 12.25% Corporate & Commercial Corporate & Banking Commercial 74.91% Banking 84.91% 2015 Gross Loans - N2.03tn 2014 Gross Loans - N1.76tn 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 – 2015 Loans by Sector – 2014 o Gross Loans – N2.03tn o Gross Loans – N1.76tn Well Diversified Loan Portfolio 21
Slide 22: NPL by Sectors
NPL by Sectors 2015 2014 o Total NPLs – N44.90bn o Total NPLs – N30.77bn o NPL Ratio – 2.2% o NPL Ratio – 1.8% o We continue to develop our Risk Management Strategy and improve on the quality of our loan portfolio. o Overall NPL ratio of 2.2% 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 of 30% for Liquidity and 16% Capital Adequacy Ratio for Banks with international authorization and are systematically significant. Capital Mix Capital base
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 FY2016
Outlook and Prospects for FY2016 Retail Banking: The bank will continue to grow its retail Customer Services : At the center of the Group’s pursuit of business especially in liability generation. This will be excellent customer service, we would continue to focus on achieved through the deployme
Slide 27: Guidance for FYE 2016
Guidance for FYE 2016 FYE 2015 Achieved FYE 2016 Projection Capital Adequacy 21.00% 19.00% ROAE 18.40% 18.50% Cost to Income 57.20% 55.00% ROAA 2.70% 2.60% NIM 8.10% 8.00% Business line & Liquidity Ratio 54.10% 44.00% Geography NPL 2.18% 2.50% NPL Coverage 96.90% 95.00% Loan to Deposit 67.20% 65.00%
Slide 28: Thank you
Q&A Thank you 32