Zenith Bank Plc · NSENG:ZENITHBANK
Zenith Bank — FY2023 Earnings Presentation
45 slides from Zenith Bank's earnings presentation, Jun 11, 2024
Slide 1: Presentation to Investors & Analysts
)2 REPORT Presentation to Investors & Analysts NS
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 © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors &
Slide 5: Macroeconomic and Operating Environment Overview
Macroeconomic and Operating Environment Overview Real GDP Growth: GDP Growth Rate Nigeria’s real GDP grew by 3.46% y/y in Q4 2023. This was driven mainly by the Services sector which recorded a growth of 3.98% thereby contributing 56.55% to the aggregate 3.46% GDP. 3.54% 2.51% 2.54% 3.52% 2.31% He
Slide 6: Macroeconomic and Operating Environment Overview Contd.
Macroeconomic and Operating Environment Overview Contd. Nigeria is now an attractive market for FDIs in both capital markets and money markets. This is as a result of the increase in the pricing of government securities arising from monetary policy rate hikes intended to curb inflation. Effectiv
Slide 7: Our Investment Proposition
Our Investment Proposition Market supremacy in both the corporate and retail space, strong capital and liquidity buffer, robust ERM practices and excellent value creation for shareholders supported by remarkable customer service. A dominant player in the Nigerian Banking Industry: Controls a signi
Slide 8: Our Investment Proposition Contd.
Our Investment Proposition Contd. Sustained value creation: Institution with strong capital buffers and best in class talents. Largest market capitalization in the banking industry as at 31 December 2023. Impressive growth in share price over the years. 38.68 24.66 25.15 24.50 19.21 2019 2020
Slide 9: QR Banking
QR Banking Awards © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 9
Slide 10: Non-financial Highlights
Non-financial Highlights © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 10
Slide 11: Non-financial Highlights Contd.
Non-financial Highlights Contd. Number of Customers Number of Cards Issued Total Number of Customers (millions) Total Number of Cards Issued (millions) 33 25 28 21 18 14 13 10 9 7 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Year Year © 2023 ZENITH BANK PLC | Full Year Group Results Presentatio
Slide 12: Non-financial Highlights – Awards and Recognitions
Non-financial Highlights – Awards and Recognitions Number One Bank in Nigeria by Tier-1 Capital Best Bank in Nigeria (2024) (2023) Best Corporate Governance Bank of the Year (2023) 'Financial Services' Africa (2023) Best Commercial Bank in Nigeria (2023) Best Corporate Governance, Nigeria (2023) Mos
Slide 13: Non-financial Highlights: Environmental, Social and Governance (ESG)
Non-financial Highlights: Environmental, Social and Governance (ESG) Sustainability is an integral part of our corporate identity and at the heart of our business. We evaluate our corporate success against key sustainability metrics, and remain committed to upholding the highest sustainability stand
Slide 14: Non-financial Highlights: ESG Contd.
Non-financial Highlights: Environmental, Social and Governance (ESG) Contd. Zenith Bank adheres to global sustainability principles and standards to ensure that corporate action is aligned with international best practices. Each budgetary category and related project is carefully selected in ensurin
Slide 15: Non-financial Highlights: Other Social Impact/ESG Footprint
Non-financial Highlights: Other Social Impact/ESG Footprint • Publication of the Zenith Bank Sustainability Report. • Sponsorship of War Against Addictions (WAA) Schools’ Tour. • Sponsorship of students for Microsoft Office Specialist World Championship. • Sponsorship of Female Basketball League. •
Slide 16: Group Results
Group Results © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 17: Financial Highlights – FYE 2023
Financial Highlights – FYE 2023 • Strong earnings and impressive capital buffer. Income Statement Balance Sheet Gross earnings: Customers’ N2.13Tn +125% YoY deposits: N15.17Tn +69% YoY Net-interest income: N736.2Bn +101% YoY Gross loans: N7.06Tn +71% YoY Non-interest income: N918.9Bn +141% YoY Total
Slide 18: Financial Highlights – FYE 2023 Contd.
Financial Highlights – FYE 2023 Contd. • Stellar prudential ratios. Key Ratios 31-Dec-23 31-Dec-22 % change Earnings per share (EPS) N21.55 N7.14 202% Return on average equity (RoAE) 36.6% 16.8% 118% Return on average assets (RoAA) 4.1% 2.1% 95% Net interest margin - NIM 7.3% 7.3% 0% Cost of funds 3
Slide 19: Income Statement
Income Statement • Strong profit before tax (PBT), bolstered by growth in interest income and trading gains. Group Group YoY (N’million) 2023 2022 Change Gross earnings 2,131,750 945,554 125% Interest and similar income 1,144,674 540,166 112% Interest and similar expense (408,492) (173,539) 135% Net
Slide 20: Consolidating Earnings and Profitability
Consolidating Earnings and Profitability Zenith Group continues to deliver attractive Gross earnings (N’Bn) earnings profile, supported by a robust revenue base. 2,132 766 946 662 696 Gross earnings increased by 125% YoY from N946 billion in 2022 to N2.13 trillion in 2023. 2019 2020 2021 2022 2023
Slide 21: Consolidating Earnings and Profitability Contd.
Consolidating Earnings and Profitability Contd. Net Interest Margin Net Interest Margin - NIM remained flat YoY despite market volatility. 8.3% 7.3% 7.3% 6.8% 6.7% Cost of Funds rose to 3.0% in 2023 from 1.9% recorded in 2022 as a result of consistent rate hikes during the year. 2019 2020 2021 2
Slide 22: Diversification of Revenue Base
Diversification of Revenue Base % to Total % to Total N'million 2023 2022 YoY • Contribution of non- Revenue Revenue interest income to total Interest income 1,144,674 53.7% 540,166 57.1% 111.9% revenue increased from Trading income 566,973 26.6% 212,678 22.5% 166.6% 42.9% in FYE 2022 to Gross Fees
Slide 23: Revenue Base: Interest Income Lines
Revenue Base: Interest Income Lines • Increase in interest income across all elements, culminating in a 112% YoY growth. Interest Income FYE 2023 FYE 2022 N'million 2023 2022 YoY Placement with Placement with banks & discount Loans and advances 671,920 370,446 81% banks & discount houses houses Gove
Slide 24: Revenue Base: Non-Interest Income Diversification
Revenue Base: Non-Interest Income (NII) Diversification • Non-interest income increased by 141% YoY as growth was recorded across most income lines. 2023 N'million 2023 2022 YoY 2022 Fees on electronic Fees on electronic products Fees on electronic products 51,818 45,739 13% products 5.2% Account ma
Slide 25: Interest Expense: Funding Cost Optimization
Interest Expense: Funding Cost Optimization Interest Expenses 2023 Borrowed Current • Interest expense rose by 135% YoY, on the back of funds and accounts significant growth in deposits (69%), exchange lease 23.7% 24.9% rate and general increase in interest rate environment. Savings accounts Time de
Slide 26: Continuous Efforts Towards Cost Optimisation
Continuous Efforts Towards Cost Optimisation. • Total operating expense grew by 32% YoY due to increase in regulatory charges and inflationary pressures. Total Operating Expenses 2023 2022 Security & cash N'million 2023 2022 YoY Security & cash Fuel & Outsourcing Fuel & handling Personnel expenses 1
Slide 27: Balance Sheet – Assets
Balance Sheet – Assets • Strong and liquid balance sheet - well positioned for growth opportunities. Group Group YoY (N‘million) Dec-23 Dec-22 Change Cash and balances with central bank 4,253,374 2,201,744 93% Treasury bills 2,736,273 2,246,538 22% Assets pledged as collateral 308,638 254,663 21% Du
Slide 28: 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-23 Dec-22 Change Customers’ deposits 15,167,740 8,975,653 69% Derivative liabilities 70,486 6,325 1014% Current inc
Slide 29: 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 2023 FYE 2022 N'million 2023 2022 YoY Due from Due from other banks other banks Cash 146,264 85,437 71% Debt securities Debt securities 23.1% 38.8% 23.
Slide 30: Risk Management
Risk Management © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 31: Healthy Risk Assets Portfolio
Healthy Risk Assets Portfolio NPL Coverage Ratio Our Risk Management Strategy 191.1% The Group adopts a holistic and integrated approach to risk management and therefore, brings all risks together 148.2% 113.9% 114.4% 115.9% under one or a limited number of oversight functions. Risk management i
Slide 32: Focused Risk Management via Portfolio Diversification
Focused Risk Management via Portfolio Diversification • Well diversified loan portfolio across sectors supports asset quality. • Loans and advances grew by 71% YoY, while still maintaining the Group’s risk acceptance criteria. Loans by Sector – FYE 2023 Loans by Sector – FYE 2022 Communication Real
Slide 33: NPL by Sectors
NPL by Sectors FYE 2023 FYE 2022 General Commerce Education General Education 27.89% Commerce 0.28% Agriculture Communication 0.25% 14.71% Agriculture 1.62% 0.05% 1.20% Transportation Oil and Gas 5.27% 44.37% Communication Oil and Gas Power 0.05% 30.65% 0.11% Transportation Government 8.47% 0.27% Po
Slide 34: Foreign Currency Loans & Restructured Loans
Foreign Currency Loans & Restructured Loans Foreign Currency Loans Cumulative Restructured Loans FYE 2023 FYE 2023 % to USD loans by % to US$ % to Gross Restructured % to Gross US$' m N'm N'm Restructured sector loans loans Loans by sector loans loans Oil and gas 1,906 1,814,519 50.3% 25.7% Oil and
Slide 35: Strong Capitalisation
Strong Capitalisation • Solid and high-quality capital position provide room for further growth. Liquidity & Capital Adequacy 71.2% 75.0% 71.0% 66.2% 57.3% Capital and liquidity ratios – well 23.0% 21.0% 19.8% 21.7% 22.0% above regulatory requirements of 30% for Liquidity and 15% for Capital Adequac
Slide 36: Business Segments Performance & Subsidiary Review
Business Segments Performance & Subsidiary Review © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 37: Performance – By Business Segments
Performance – By Business Segments • Continuous diversification and enhanced profitability across core business segments. Gross Revenue 2023 FY 2023 (N’million) Corporates Commercial/ 58.0% Public Corporates Public Retail Consolidated SMEs 11.2% Gross revenue 1,237,126 239,589 487,237 167,798 2,131,
Slide 38: Loans & Deposits – By Business Segments
Loans & Deposits – By Business Segments • Impressive retail growth recorded in both gross loans and total deposits. Gross Loans Total Deposit FYE 2023 Gross Loans – N7.06 Trillion FYE 2023 Total Deposits – N15.17 Trillion Commercial Corporates & SMEs Commercial 20.3% 22.7% & SMEs 24.7% Corporates Pu
Slide 39: Electronic Banking Products Performance by Channels
Electronic Banking Products Performance by Channels. Value of Electronic Product Transactions Number of Electronic Product Transactions FYE 2023 FYE 2022 YoY FYE 2023 FYE 2022 YoY Total Transaction Total Number of 140,701 103,734 36% 2,083 2,231 (7%) Value (N'bn) Transactions (million) 769 50,639 50
Slide 40: Geographical Presence
Geographical Presence © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts | Page 40
Slide 41: Performance by Geography
Performance by Geography • Significant growth in the contribution of subsidiaries to the Group PBT YoY. FYE 2023 (N’million) 2023 PBT Nigeria Rest of Africa Europe Eliminations Consolidated Total Revenue 1,883,899 174,567 106,594 (33,310) 2,131,750 Total expense (1,206,017) (92,182) (57,493) 19,904
Slide 42: Strategy & Outlook
Strategy & Outlook © 2023 ZENITH BANK PLC | Full Year Group Results Presentation to Investors & Analysts
Slide 43: Strategies for Driving our Vision
Strategies for Driving our Vision 1 2 Adopting efficient digital Attracting cost effective channels. Compete aggressively deposits from the retail end for market share while Attracting talented people and of the market for Deliver superior investing in training. focusing on high deployment in
Slide 44: Guidance for FYE 2024
Guidance for FYE 2024 FYE 2024 Guidance FYE 2023 Achieved FYE 2023 Guidance PBT N650Bn N796Bn N510Bn Effective Tax Rate 15% 15% 15% PAT N553Bn N677Bn N433.5Bn ROAE 21.8% 36.6% 35.0% ROAA 2.5% 4.1% 4.0% NIM 10.0% 7.3% 8.0% Cost of Funds 5.0% 3.0% 2.2% Cost of Risk 3.0% 7.3% 8.8% Cost to Income 50.0%
Slide 45: 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