Zenith Bank reports 22.7% Net Income growth and 17.8% Revenue growth
27 Feb 2017 • About Zenith Bank (
$ZENB) • By InTwits
Zenith Bank reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zenith Bank is a growth stock: 2016 revenue growth was 17.8%, 5 year revenue CAGR was 17.1% at 2016 ROIC 11.1%
- Zenith Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's in pair with industry average of 3.6%.
- CAPEX is quite volatile: 27,421 in 2016, 25,019 in 2015, 12,232 in 2014, 10,772 in 2013, 11,290 in 2012
- The company has business model with average profitability: ROIC is at 11.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zenith Bank ($ZENB) key annual financial indicators
| mln. NGN | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 291,848 | 335,150 | 402,680 | 430,881 | 507,761 | 17.8% |
| Net Income | 100,147 | 94,576 | 99,275 | 105,531 | 129,434 | 22.7% |
Balance Sheet
|
|---|
| Cash | 332,515 | 860,580 | 1,259,148 | 1,033,755 | 669,058 | -35.3% |
| Short Term Debt | 56,066 | | | | 199,287 | |
| Long Term Debt | 15,138 | 119,678 | 359,342 | 645,561 | 567,940 | -12.0% |
Cash flow
|
|---|
| Capex | 11,290 | 10,772 | 12,232 | 25,019 | 27,421 | 9.6% |
Ratios
|
|---|
| Revenue growth | 26.5% | 14.8% | 20.1% | 7.0% | 17.8% | |
| Net Income Margin | 34.3% | 28.2% | 24.7% | 24.5% | 25.5% | 1.0% |
| CAPEX, % of revenue | 3.9% | 3.2% | 3.0% | 5.8% | 5.4% | -0.4% |
| ROIC | 19.0% | 17.6% | 15.0% | 11.2% | 11.1% | -0.0% |
| ROE | 23.5% | 19.6% | 18.8% | 18.4% | 20.0% | 1.5% |
Revenue and profitability
Zenith Bank's Revenue surged on 17.8% in 2016.
Net Income marign increased slightly on 1.00 pp from 24.5% to 25.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
Zenith Bank's CAPEX/Revenue was 5.4% in 2016. Zenith Bank showed CAPEX/Revenue growth of 2.2 pp from 3.2% in 2013 to 5.4% in 2016. For the last three years the average CAPEX/Revenue was 4.7%.
Return on investment
The company operates at good ROE (19.96%) while ROIC is low (11.12%). ROIC showed almost no change in 2016. ROE increased slightly on 1.5 pp from 18.4% to 20.0% in 2016.
Leverage (Debt)
Debt jumped on 18.8% in 2016 while cash dropped on 35.3% in 2016.
Appendix 1: Peers in Banks
Below we provide Zenith Bank benchmarking against other companies in Banks industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kazkommertsbank JSC ($KKB) | | 6.0% | 16.3% | 41.4% | |
| Sberbank Of Russia ($SBER) | 37.2% | 25.1% | 23.4% | 27.4% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | | 23.7% | 18.9% | 26.8% | 27.0% |
| Yapi Ve Kredi Bankasi As ($YKBD) | | 4.8% | 19.7% | 25.3% | 17.8% |
| Mcb Bank Ltd ($MCBS) | | -1.7% | 19.4% | 22.4% | -10.7% |
| |
|---|
| Median (43 companies) | 21.7% | 4.2% | 11.5% | 4.2% | 3.8% |
|---|
| Zenith Bank ($ZENB) | | 14.8% | 20.1% | 7.0% | 17.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Banque Marocaine Du Comm Exterieur ($69IR) | 3.7% | 9.7% | 4.3% | 26.8% | |
| Lloyds Banking Group ($LLPC) | 8.0% | 8.9% | 13.1% | 13.6% | 14.5% |
| Banco Santander Sa ($BNC) | 2.7% | 2.6% | 8.9% | 10.2% | 9.1% |
| Guaranty Trust Bank ($GRTB) | 6.7% | 6.1% | 6.8% | 7.7% | |
| Diamond Bank ($DBPA) | 8.2% | 7.9% | 6.0% | 6.7% | |
| |
|---|
| Median (41 companies) | 2.2% | 2.7% | 2.1% | 2.5% | 1.9% |
|---|
| Zenith Bank ($ZENB) | 3.9% | 3.2% | 3.0% | 5.8% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 21.7% | 26.9% | 30.1% | 30.3% | 28.5% |
| Guaranty Trust Bank ($GRTB) | 19.8% | 18.9% | 17.8% | 16.0% | |
| Mcb Bank Ltd ($MCBS) | 15.0% | 14.4% | 15.8% | 14.9% | 12.5% |
| United Bank Ltd ($UBLS) | 11.7% | 11.8% | 13.8% | 12.6% | 10.7% |
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 8.8% | 9.0% | 12.9% | 10.8% | |
| |
|---|
| Median (43 companies) | 6.0% | 5.3% | 4.4% | 3.4% | 4.5% |
|---|
| Zenith Bank ($ZENB) | 19.0% | 17.6% | 15.0% | 11.2% | 11.1% |
