Zenith bank february newsletter 2015

Z-Business NewsZENITH BANK (GHANA) LTD. Monthly Bulletin – February 2015

Zenith Bank Plc., widely regarded as the leader in financial solutions in most facets of banking, has finally started to play deeper in the retail end of the banking industry, using its high technology and innovative products.Over the years, using technology as one of its major advantages, Zenith Bank has successfully served customers at the high end of the market and delivered impressive returns to shareholders in the process.The Bank has equally established itself as a leader in corporate and investment banking, with the KPMG’s ‘Nigeria Banking Industry Customer Satisfaction Survey of 2014’ con-firming the Bank’s position as the Most Cus-tomer Focused Bank in the country in both the retail and corporate segments.With the Bank’s entry into the retail space, more customers will now be able to access efficient service delivery that hitherto have been available to only high net worth cus-

tomers and corporates. The Bank’s offer-ing in the retail space include the Aspire account targeting the youth; the eaZySave classic and eaZySave Premium accounts both of which have zero account opening balances; as well as the Zenith Premium Gold and Zenith Premium Platinum, both of which are COT free and interest bearing.

The KPMG survey, which confirmed Ze-nith Bank’s status as the Most Customer Focused Bank, focused on the perceived quality of customer service delivery by banks from the customer’s perspective across the retail, corporate/commercial and small & medium sized enterprises (SME) segments. And for 2013 and 2014, Zenith Bank led as the preferred by cus-tomers.

For the second consecutive year in the retail segment, Zenith Bank emerged as the Most Customer Focused Bank closely followed by Diamond Bank who moved to second (from last year’s fourth place) with GTBank in third place.

In the SME segment, Zenith Bank moved from second position in 2013 to become the Most Customer Focused Bank, fol-

lowed by Dia-mond Bank and Standard Char-tered Bank in third place. Corporate banking custom-ers also ranked

ECONOMY

WORLD ECONOMY

Economy World Economy...............................................................1 Zenith Bank Enters Retail Space with Innovative Products......................................................1 Zenith Bank Recognised as ‘Cashless Champion of the Year’..................................................3 Ghanaian Economy......................................................5Financial markEts UpdatE Financial Markets Update................................................6 ExcErpts oF BoG BUllEtin...........................7ZEnith in FocUs Zenith Bank Crowns Prolific 2014 with Top-Notch Financials.......................................................9 Zenith Bank Marks Chinese New Year with Tea-Tasting Event...................................................10 Zenith March Calendar...................................................11JokEs cornEr.......................................................11Financial Statements for the Year Ended Dec 31, 2014.................................................12

In this Issue

PG1

Zenith Bank as the most customer focused for 2014 year with GTBank and Citibank coming second and third respectively.The biggest gains were in the area of con-venience, however, the higher satisfaction levels recorded in this segment were driv-en more by the performance of the top five banks than for the industry as a whole.Completeness and accuracy of information provided topped the list of important issues for nearly all corporates surveyed while the biggest area requiring improvement remains knowledge of the customer’s business.

Aside being the Most Customer Focused Bank, Zenith Bank’s performance on all parameters has been recognized by other bodies. A survey conducted by Pricewa-terhouseCoopers (PWC) to determine the most respected companies and Chief Ex-ecutives in Nigeria, Zenith Bank emerged first among the banks. In arriving at the con-clusion, PWC said a respected company is defined by these enviable parameters:

A good corporate citizen, which is socially responsible with high ethical standards; a trusted company, which promotes good

Zenith Bank enters retail space with innovative products

Z-BUSINESS NEWS Monthly Bulletin - February 2015 2

values with a unique and excellent leader-ship style, coupled with strong management principles and structure plus a smooth suc-cession plan as well as a very resourceful company with excellent business culture.Others are: a visionary and revolutionary company with strong focus, innovative with popular brands of high quality; engaging in human capital development and high ca-pacity building and an indigenous company with high local content.

Good corporate governance practice, high shareholder interest and value, harmonious industrial relations, friendly and good work-ing environment, global and internationally recognised (Multinational) and size of com-pany/largest in Africa/industry leader were other parameters used in arriving at their inference. PWC may have taken into cog-nisance Zenith Bank’s adherence to good corporate governance practices as well as global best practices and its emergence as a globally recognised brand.

Officials of the Bank believe with this track record and the suite of innovative products on offer guarantee that customers and po-tential customers at all levels will enjoy the same high-quality of banking service that Zenith Bank has been known for since in-ception.

Run by a stable Board and Management, Zenith Bank has created a professional environment where individuals are encour-

aged to aspire to achieve their potentials. Currently under the leadership of Mr. Peter Amangbo, Zenith Bank has a pool of talents at both the middle and top management lev-el, which has enabled it to remain competi-tive through the series of banking reforms in the country.

The Bank, Nigeria’s biggest by Tier-1 cap-ital sees technology as an enabler and as a generator of new opportunities. “We are forward-thinking, benchmarking trends in technology to shape our future coupled with our practical delivery on a highly automated platform that makes us unique,” Amangbo recently said. “As the country’s information technology (IT) infrastructure improves, our leading edge in IT keeps us well posi-tioned in the global banking community to sustain our offering of exceptional E-bank-ing services. This is complemented by our risk management system that creates a blend that not only grows our customers’ businesses but also strengthens them. Our credit management system stresses ratio-nal procedures and transparency,” he was quoted as saying.

Zenith Bank Plc. blazed the trail in digital banking in Nigeria, scoring several firsts in the deployment of information and com-munication technology (ICT) infrastructure to create innovative products that meet the needs of its teeming customers. The bank is verifiably a leader in the deployment of var-ious channels of banking technology, and

the Zenith brand has become synonymous with the deployment of state-of-the-art tech-nologies in banking.

Financial results: The Bank has been posting impressive financial results over the years, rewarding shareholders with equally impressive dividends. For instance, five year performance from 2009 to 2013 showed steady growth in profit and returns on investments.

For instance, revenue grew from N277 billion in 2009 to N244 billion in 2010, N307 billion in 2012 and N351 billion in 2013. Profit be-fore tax rose from N35 billion, to N50 billion in 2010, N61 billion in 2011, N101 billion in 2012 and N111 billion in 2013.

Shareholders have been benefitting from the growth witnessed in the profitability over the years. Shareholders got a dividend of N11 billion in 2009, N26 billion in2010, N29 billion in 2011, N50 billion in 2012 and N54 billion in 2013.

Zenith Bank ended the nine months to September 30, 2014 with profit before tax of N87 billion, profit after tax of N71 billion. Total assets stood at N3.408 trillion and shareholders’ funds N523 billion.

Zenith Bank Plc. was established in May 1990, and commenced operations in July of the same year as a commercial bank. The Bank became a public limited compa-ny on June 17, 2004 and was listed on the Nigerian Stock Exchange (NSE) on October 21, 2004 following a highly successful Ini-tial Public Offering (IPO). The Bank has a shareholder base of about one million and is Nigeria’s biggest bank by tier-1 capital. In 2013, Zenith Bank listed $850 million worth of its shares on the London Stock Exchange (LSE).

The Bank has over 500 branches and business offices in all states of the fed-eration and the Federal Capital Territory (FCT). In March 2007, Zenith Bank was li-censed by the Financial Services Authority (FSA) of the United Kingdom to establish Zenith Bank (UK) Limited as the United Kingdom subsidiary of Zenith Bank Plc. Zenith Bank also has subsidiaries in Gha-na, Sierra Leone, and Gambia. The bank also has representative offices in South Africa and The People’s Republic of China. Source: www.thepost-ng.com


Zenith Bank Plc said it has been named the ‘Cashless Champion of the Year’ by Master-Card. A statement from the Bank explained that it beat other Nigeria’s major banks to the award as it said it achieved overall per-centage growth on all its e-channels (PoS, ATM, e-commerce, and others).

Presenting the plaque and certificates at the Bank’s headquarters in Victoria Island, La-gos recently, the Area Business Head, West Africa, MasterCard, Omokehinde Ojomuy-ide, commended the Bank for championing the cashless society campaign.

Certificates were present-ed to the Head, E-business department, Juliet Nwang-wuwa; Head, Retail Bank-ing, Chioma Nkechika, and Head, IT department, Fran-cis Chukwuyem for their respective roles in the bank’s achievement.

Other members of staff from various depart-ments of the Bank also received certificates for their efforts in promoting the overall per-centage growth on all e-channels.Zenith Bank Plc has built a reputation in e-Banking in Nigeria, having blazed new

trails in the deployment of Information and Communication Technology (ICT) infra-structure to create innovative products that meet the needs of its teeming customers.The Bank is verifiably a leader in the deploy-ment of various channels of banking tech-nology, and the Zenith brand has become synonymous with the deployment of state-of-the-art technologies in banking.Source: www.thepost-ng.com

Japan emerges from recession But growth suBdued

Japan’s economy rebounded from recession in the final quarter of last year but growth was weaker than expected as household and corporate spending disappointed, un-derlining the challenge premier Shinzo Abe faces in shaking off decades of stagnation.

The annualized 2.2 percent expansion in October-December was smaller than a 3.7 percent increase forecast in a Reuters poll, suggesting a fragile recovery as the hang-over from last year’s sales tax hike lingered.The preliminary reading for gross domes-tic product (GDP), which translates into a quarter-on-quarter increase of 0.6 percent, follows two straight quarters of contraction, data by the Cabinet Office showed on Mon-day. Economic Minister Akira Amari told

reporters after the data’s release that the economy was on track for a recovery with signs consumer sentiment is picking up. But analysts pointed to the weak rebound in consumption and capital expenditure as worrying signs to the outlook.

“These are somewhat disappointing fig-ures,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “The sit-uation remains weak and companies are clearly postponing investments.”

The rebound from recession, however, will allow the Bank of Japan(BOJ) to hold off on expanding monetary stimulus for now even as slumping oil prices push inflation further away from its 2 percent target, analysts say.

“The BOJ is expected to keep monetary policy unchanged for a while to see the im-pact from the latest easing,” said Taro Saito, director of economic research at NLI Re-search Institute.

The data will be one of the key factors the BOJ will scrutinize at its two-day rate review ending on Wednesday, where it is widely set to maintain the current pace of asset pur-chases in its monetary stimulus program.Private consumption, which makes up about 60 percent of the economy, rose 0.3 percent in the final quarter, less than a median mar-ket forecast for a 0.7 percent increase.Capital expenditure also rose just 0.1 per-cent after two straight quarters of declines, suggesting the BOJ’s aggressive money

Zenith Bank recognised as ‘cashless champion of the Year’

GOING CASHLESS


printing has yet to nudge firms into boosting investment.

In a glimmer of hope, external demand add-ed 0.2 percentage point to growth on robust shipments to the United States and China, Japan’s two biggest export destinations.One of the biggest headwinds for Japan is a deteriorating global economic outlook, which has triggered a wave of monetary easing around the world to fight off defla-tionary pressures and prop up growth.

But Japanese policymakers are hoping a rebound in exports, which had been a soft spot in the economy despite support from a weak yen, and lower fuel costs will en-courage firms to spend more on wages and expenditure.

“The economy will recover backed by firm domestic demand as Japan’s terms of trade improves on oil price falls,” Amari said.Japan’s economy slid into recession in Ju-

ly-September last year, prompting Abe to delay a second sales tax hike initially sched-uled in October 2015.

The slump slowed Japan’s quest to beat off nearly two decades of grinding deflation, and forced the BOJ into expanding mone-tary stimulus in October last year.(Additional reporting by Stanley White, Mari Saito and Kaori Kaneko; Editing by Shri Na-varatnam) Source:www.reuters.com

We were somewhat bemused when the Fed upgraded their assessment of the US economy at their FOMC meeting last week. Events must have occurred between De-cember and January for them to announce this upgrade and it can only be because they expect the consumer to spend the “tax cut” from lower energy prices. They may also believe that employment gains will con-tinue despite news flow from the corporate sector that would indicate otherwise.

At the moment, we see two competing forces within the US economy. On the one hand, the consumer and non-energy corpo-rate sector are much better off because of lower energy prices. If they choose to spend this windfall on domestic consumption, then there is very good reason to believe the US economy will continue to muddle through quite nicely. On the other hand, the energy sector has certainly boosted the US econo-my since the financial crisis and has creat-ed lots of high paying jobs with wonderful multiplier effects. Furthermore, up until last

summer, it can be argued that the US Dollar was undervalued and this also benefitted the multi-national corporate sector. With the

collapse in the price of oil and a near 20% rise in the US Dollar, the corporate sector is now a potential risk for the US economy.There are enough commentators that argue whether Fed policies have created a finan-cial bubble. We think that part of this bubble may include executive remuneration in the quoted corporate sector. By this, we mean that executives receive the vast majority of their overall compensation via share options and, as a result, do everything in their power to boost the share price of the companies they work for. The obvious mechanism is share buybacks (see first chart below) but the gaming of earnings expectations ev-ery quarter, the strenuous use of reporting versus GAAP earnings, the lack of capex

(which is earnings negative short-term but would improve corporate performance long-term) and the use of flexible labour policies also contribute to a remuneration bubble phenomenon. For those who want to read more, Andrew Smithers has written exten-sively on this subject in both his FT blog and his recent book.

So, our biggest concern is whether the burst-ing of the energy sector alongside a bursting of the executive remuneration bubble will hurt the economy before the US consumer really has time to spend their windfall from lower gas prices. We argued mid last week that the risks to the US economy were on the downside. The advance estimate of US GDP released on Friday indicates that this may be happening already. Growth slowed from 5% in 3Q to 2.6% in 4Q, and although consensus estimates have growth in 1Q and 2Q to 2.8% and 2.9% respectively, we think the risk could easily tip to the downside on these estimates.Non financial companies have been the major buyer of equities in recent years

the us consumer is vital for equitY markets

Live the Zenith Life


(see chart below). Therefore, if buybacks suddenly slow as the economy stumbles then this could easily cause equity markets to correct lower. In fact, with the S&P now no higher than in the last five months and the NYSE composite the same level as 11

months ago, we argue that the market is los-ing momentum and is now more vulnerable than since 2011.

If the equity market does enter a bear mar-ket in 1H this year, then with the potential

negative feedback loop to the real economy, the risks of a recession escalate sharply. That said, the US consumer has confound-ed expectations before and could come to the rescue in 2H this year but how much, if any, damage will be done by then?For our part, we remain very defensive in our portfolios. We think that the Fed is too optimistic and will be forced to keep rates on hold this year which should help rates and bond markets which is where we have focused recent investment in the RMG Real Return Fund. Equity markets are vulnerable in the US and we (marginally) prefer Euro-pean and Japanese equities where the Cen-tral Banks are printing. In FX, we are abso-lutely seeing currency wars with 14 central banks having eased policy so far in January (Denmark three times in two weeks!). This should be fertile ground for active managers such as ourselves and is how we have posi-tioned the RMG FX Strategy so far this year. Source: www.marketviews.com

UK equity income funds tend to invest in large, blue chip companies that are making regular profits and paying consistent divi-dends, and can form a core component of investors’ equity exposure, especially in the current volatile environment.

However, around 87% of all dividend income in the UK is produced by 15 companies and 58% is produced by only five companies.“This means that there is often a high cross-over of stocks between one UK equity in-come fund and another, so those who invest in a number of different funds might not be achieving the level of diversification they expect,” says Connolly at AWD Chase de Vere. “It is, therefore, sensible for many in-come investors to hold global or internation-al equity income funds alongside UK equity income.” Global equity income is becoming an increasingly popular as a growing band

of companies throughout the world pay larg-er dividends to shareholders – a trend that is expected to continue.

“Although overseas companies are less en-trenched in paying dividends than their UK counterparts, it’s becoming far more com-mon, especially amongst cash-rich Asian companies,” says Modray. Fund manage-ment houses are responding with a growing

range of global equity income funds, as well as regional funds, investing in good quali-ty companies around the globe that have a higher-than-average dividend yield. Invest-ments could include Philip Morris, the US cigarette manufacturer, Roche, the Swiss global health-care company, and Deutsche Telekom, the German telecoms business.

McDermott says: “You can get some good global equity income funds, as well as good regional funds covering everything from Europe to emerging markets these days.”-Yields do differ, but global fund yields are pretty close to UK fund yields at the moment – typically between 3.7% and 5%.Globally-invested investment trusts aimed at income-seeking investors have been performing well and most are now trading at premiums.

Following concerns about pub-lic debt, Economist Dr Eric Os-ei-Assibey has explained that although borrowing is essential for economic development, how the loan is negotiated has dire consequences for any govern-ment. The lecturer with the Uni-versity of Ghana told Joy FM’s

Super Morning Show Monday that some countries are borrow-ing much more than Ghana but because of fiscal discipline and macroeconomic stability their debts were more sustainable.“If you compare [Ghana’s debt to GDP ratio] to other coun-tries, it is not too high. In US, it

investing gloBallY for income

Borrowing not the proBlem;

fiscal discipline is - dr. osei-assiBeY

GHANAIAN ECONOMY


is about 105%, in Japan is about 235%...in many other European countries it is above

80%”. Prime Minister Shinzo Abe has bor-rowed more than Ghana’s Mahama, but he says a look into the debt structure and the affordability of these debts in developed countries shows that Ghanaians have cause to be concerned.He said despite Japan’s frightening debt lev-el, it has an interest rate of 1.3% while inter-est rate in America is 3.5%. Ghana however has an interest rate hovering around 25%, he stated. “These countries that we say have

borrowed more, if you compare in terms of cost, affordability, debt servicing, the interest that we pay on our debt, we cannot compare ourselves to these countries.”

An IEA assessment of the economy has re-ignited the debate over Ghana’s debt sus-tainability. Latest release from the Bank of Ghana shows that government contracted 10 billion cedis in last four months of 2014 to bring Ghana’s public debt to Gh₵ 76bn as of December 2014.

This amount represents about 67% of the country’s total GDP, which is beyond the 60% mark, a level thought to be dangerous and unsustainable despite government as-surances that it has the discipline to control the debt.

Throwing some light on the economic de-bate, the university don explained that bor-rowing was the way to go because Ghana’s

poor infrastructure demands more resources.“We have huge financing gap for infrastruc-ture. We need to fix our roads, we need to improve water, we need to have adequate power supply all of that require money and therefore we cannot say that government should not borrow”, he maintained.

He was, however, quick to add that the im-pact of government’s excessive borrowing, especially domestically, is that the private sector ability to access money is seriously curtailed.

This makes it expensive for businesses to go for loans from banks and, therefore, in-creases the cost of doing business in Gha-na.“If the private sector is to borrow at around 30% to 35% interest rate just because gov-ernment keeps borrowing domestically, then of course it is a cause for concern”, the lec-turer said. Source: www.myjoyonline.com

February undoubtedly had some good news, the best of which came late in the month. An International Monetary Fund (IMF) team agreed to lend Ghana almost $1bn to help boost foreign-exchange reserves and bol-ster Africa’s worst-performing currency. The agreement included a three-year loan programme of 660-million Special Draw-ing Rights, or $933m, Joel Toujas-Bernate, head of the mission, said in an interview

in Accra. The plan will be presented to the IMF’s board for approval in April, with the first payment of about $100m to be made shortly after, he said.

President John Dramani Mahama was forced to turn to the IMF after ballooning government debt and falling export rev-enue triggered a 31% plunge in the cur-rency against the dollar in the past year.

The IMF loan terms will require the govern-ment to cut back on spending, especially on civil servants’ salaries, which account for al-most 70% of tax revenue. The programme aims at ambitious fiscal consolidation over the three years, which will be based on ex-penditure restraint, especially with regard to the wage bill, Mr Toujas-Bernate said.

However Fitch Ratings are of the view that sticking to the IMF programme, which in-cludes ambitious fiscal consolidation tar-gets, will be challenging ahead of elections in 2016. Fitch also believed that the pro-gramme will provide an impetus for donors to re-engage with Ghana, providing much needed foreign currency. It added that the focus on three areas: “restraining and priori-tizing public expenditure, increasing tax col-lection and strengthening the effectiveness of the central bank’s monetary policy” clear-ly identified Ghana’s key sovereign credit weaknesses; and successful implementa-tion would improve fiscal discipline, help to restore macroeconomic stability and support the currency.

FINANCIAL MARKETS UPDATE

international monetarY fund (imf) programme


INFLATIONGhana’s annual consumer inflation slowed to 16.4 percent in January, from 17.0 per-cent the month before, the statistics office said in February. The figure is higher than average inflation in the region, an indication of fiscal challenges facing the country. “The source of the easing is largely the stability in food prices that we have seen in recent months, supported by the decrease in oil prices,” deputy government statistician Baah Wadieh told a news conference. Jan-uary food inflation rose slightly to 6.9 per-cent from 6.8 percent the previous month, while non-food inflation stood at 23 percent compared to 23.9 percent in December, he said. Mineral water, soft drinks and fruit re-corded the highest inflation in the food group at 16.7 percent. Housing, water, electricity, gas and other fuels saw inflation of 32.3 per-cent, Wadieh said.

MONETARY POLICY RATEThe Bank of Ghana (BoG) has maintained the monetary policy rate at 21 per cent. Dr. Henry Kofi Wampah, Governor of Bank of Ghana, in assessing the inflation outlook; noted that inflation, which peaked in the last quarter of 2014, had begun to decline in January, 2015, on the back of tight monetary policy stance, base effects and improved in-flation expectations. He said of concern to BoG was the rise in

food inflation ahead of the lean season as well as the rising core inflation. He however, said, the latest forecasts show that the dis-inflation was likely to continue through 2015, heading towards the target band of 8.0 ±2 per cent later in 2016.

Dr. Wampah made these remarks in Accra at the BoG Monetary Policy Committee press briefing on macroeconomic situation in Ghana against the background of devel-opments in the global economy. He said the upside risks to the inflation forecasts include the effects of the prolonged energy crisis through increased input costs, higher infla-tion expectations as well as emerging pres-sures in the foreign exchange market.

Dr. Wampah said: On the downside how-ever, the pass-through effects of the falling crude oil price, declining inflation expecta-tions, the on-going fiscal consolidation, and a possible program with the International Monetary Fund are expected to exert some downward pressure on inflation and drive inflation further down towards the target bands. “In assessing risks to the outlook, the Monetary Policy Committee observed the continued vulnerability in the global environ-ment and volatilities in the financial markets which have resulted in declining commodity prices. He pointed out that in particular, the declining trends in crude oil prices continue

to worsen the risks facing most oil exporting economies. He said although the declining trend in oil prices could have a favourable effect.

THE LOCAL CURRENCY ANALYSIS AND FORECASTThe cedi remains under pressure as the factors that caused its slide in 2014 still per-sists, large fiscal and current account deficits coupled with lower prices for gold and drop in investor confidence in the government’s economic management. The government is expected to get to grips-slowly-with the eco-nomic imbalances, aided by IMF support, and the gold sector will adjust to the lower price environment.

Strong cocoa prices will be offset by weaker gold and oil prices meaning that prospects for Ghana’s commodity exports will give little support to the cedi. Furthermore, the political uncertainty connected with the 2016 Ghanaian elections will also have a nega-tive effect on the cedi. Overall, following the slump in 2014 we forecast a depreciation averaging over 10% a year in 2015-2019, with an election related spike in 2016. The cedi is forecast to weaken to an average of GHS 5.04:USD1.00. Sources: Reuters, www.Citifmonline.Com, www.Myjoyonline.Com

Eurozone consumer confidence at 89-month high An improvement in Euro area consumer confidence to an 89-month high in February gives a real lift to Eurozone growth hopes. The consumer confidence index rose by 1.8 points to -6.7 in February. This was the highest score since September 2007. (www.rttnews.com 20/02/15)

Eurozone set for vital loan talks Eurozone finance ministers are preparing for a vital third meeting, in Brussels, to try to solve the crisis over Greece’s bail-out. Greece has put forward a proposal for a six-month extension of its Eurozone loan programme instead of renewing its existing bailout deal, which comes with harsh aus-terity measures. But Germany has already rejected this. (www.bbc.co.uk 20/02/15)

US urges all sides in Greek talks to compromise. The United States has urged European leaders and Greece to all make concessions in testy negotiations over extending a loan agreement that is vital for Athens. Top US of-ficials have stepped up contact with Europe-an counterparts in recent days as Greece’s leftist-led government has tried to get Eu-rope to require less austerity in exchange for bailout money. (www.reuters.com 19/02/15)

US leading economic index rises 0.2% Suggesting a positive short-term outlook, the Conference Board has released a re-port showing a modest increase in its index

of leading US economic indicators in the month of January. The Conference Board said the leading economic index edged up by 0.2% in January following a downwardly revised 0.4% increase in December. (www.rttnews.com 19/02/15) ECB minutes highlight QE delay risks The first-ever minutes of the European Cen-tral Bank’s meetings this year reveal that chief economist Peter Praet has warned members of the hazards of delaying the introduction of quantitative easing. He said the risk from inaction might be higher than the risks of taking action. On 22nd January 2015, the ECB launched its QE programme, designed to inject at least €1.1tr (£834bn) into the ailing Eurozone economy. (www.bbc.co.uk 19/02/15)

Ireland consumer prices fall Ireland’s consumer prices declined for a second consecutive month in January drop-ping 0.6% annually following a 0.3% fall in

eXcerpts from Bank of ghana Bulletin


December, which was the first decline in ten months. On a monthly basis, the CPI fell 0.8% in January after a 0.4% decrease in the previous month. (www.rttnews.com 19/02/15) OECD upgrades Italy’s GDP outlook The Organization for Economic Cooperation and Development lifted Italy’s economic out-look citing stimulus measures from the Eu-ropean Central Bank, the fading effect of the earlier fiscal consolidation and also gains in real income due to falling oil prices. The Par-is-based OECD expects the Italian economy to expand 0.4% this year and 1.3% in 2016. In November it projected 0.2% growth this year and 1% in 2016. (www.rttnews.com 19/02/15)

French inflation turns negative Inflation in France, the Eurozone’s sec-ond-biggest economy, turned negative in January, adding to worries over deflation in the Eurozone. Prices fell 0.4% from a year earlier, with energy costs down 7.1% follow-ing the drop in global oil prices. It is the first time in more than five years that inflation in France has turned negative. (www.bbc.co.uk 19/02/15)

BOJ policy stance change would incur high cost, ex-MOF Kato says Investors concerned that the Bank of Ja-pan’s unprecedented bond buying pushed Japanese yields to record lows and boost-ed volatility should cut the central bank some slack, said Takatoshi Kato, a former top currency official. Yields on 10-year Jap-anese government bonds fell to a record low 0.195% last month and swung back to a three-month high of 0.45% as the BOJ purchases as much as ¥12tr ($101bn). (www.bloomberg.com 20/02/15)

Denmark consumer confidence improves Denmark’s consumer confidence improved for a second straight month in February, though modestly. The consumer confidence index, which illustrates the general public’s view of the current and future situation rose

slightly to 9.1 in Feb. from 9.0 in January. The figure was the highest since August. (www.rttnews.com 19/02/15)

Argentine unit of HSBC says central bank has lifted a ban on fund transfers The Argentine unit of HSBC Holdings Plc has said the central bank has lifted a ban it had placed on its international cash trans-fers. In November, Argentina charged HSBC with helping more than 4,000 clients evade taxes by stashing their money in secret Swiss bank accounts. (www.reuters.com 19/02/15)

Weaker Swedish Krona risks backfiring on exporter expansion Further Krona weakness could backfire on Swedish exporters by making it more costly to grow abroad. The central bank is pushing the exchange rate lower by cutting interest rates to a negative and starting bond pur-chases as it seeks to jolt the economy out of a deflationary spiral. The krona has slid 13% over the past year against a correla-tion-weighted basket of nine other major currencies, making it the worst performer. (www.bloomberg.com 19/02/15)

Singapore’s external trade up 4.3% in January Singapore’s non-oil domestic exports (NODX), a key gauge of the export perfor-mance of the economy, rose by 4.3% in Jan-uary on year. On a month-on-month season-ally adjusted basis, NODX rose by 1.6% in January, in contrast to the December 0.2% decrease. (www.xinhuanet.com 19/02/15)

Hungary to review forex reserves in renminbi The National Bank of Hungary has said it will launch the Budapest Renminbi Initiative in 2015 that is intended to expand the invest-ment spectrum and financing sources of Hungary. It aims to create foreign exchange and capital market infrastructures, develop the settlement system and start negotiations about Chinese capital market licences in cooperation with the major stakeholders of renminbi settlements in the financial, corpo-rate and government sector. (www.rttnews.com 19/02/15)

Mexico’s Peso rises on Greece hopes, Germany data Mexico’s Peso rose slightly on Tuesday, as positive data from Germany and hopes that Greece will reach a deal to remain in the Eurozone lifted the beleaguered currency.

Mexico’s Peso rose 0.1% in early afternoon trading to 14.9175 Pesos per dollar after data from Germany showed analyst and in-vestor sentiment climbed in February to its highest level in a year. Mexico’s IPC index was up 0.15% at 43,019.42 points. (www.af.reuters.com 18/02/15)

Oil prices fall again as inventories build Oil prices fell after the US government re-ported another record high in crude invento-ries, but prices bounced sharply off session lows on relief the builds were less than an industry group had estimated. Prices also retraced losses as investors covered more short positions in US crude futures a day ahead of the expiry of the front-month con-tract. (www.reuters.com 19/02/15)

Nigeria’s apex bank moves to stabilize currency Nigeria’s apex bank has closed the Re-tail Dutch Auction System and Wholesale Dutch Auction System Foreign Exchange window to help stabilize the nation’s cur-rency. Spokesperson for the Central Bank of Nigeria (CBN) Ibrahim Mu’ Azu has said that all demand for foreign exchange should be channeled to the Interbank Foreign Ex-change Market. The apex bank assured that the CBN would continue to intervene in the interbank foreign exchange market to meet legitimate demands. (www.xinhuanet.com 19/02/15)

Recent rate cut buys time to assess im-pact of drop in oil prices – Stephen Poloz Bank of Canada Governor Stephen Poloz has said that last month’s rate cut will buy the bank some time to assess the economic impacts of the plunge in oil prices. He said that the bank has been setting policy with a view to balance the risks facing both the outlook for returning inflation sustainably to its target, and the risks to financial sta-bility such as those posed by indebtedness of Canadian households. (www.rttnews.com 24/02/15)


China February flash HSBC PMI at four-month high Activity in China’s mammoth factory sector edged up to a four-month high in February but export orders shrank at their fastest rate in 20 months. The flash HSBC/Markit Pur-chasing Managers’ Index (PMI) inched up to 50.1 in February. (www.reuters.com 24/02/15)

Belgium business morale improves for the first time in 3 months Belgium’s business confidence rose for the first time in three months in February but the pace of improvement was less-than-ex-pected. The business confidence indicator climbed to -8.3 from January’s -8.8. Im-proved demand prospects boosted con-fidence among manufacturers, business services firms and retailers. (www.rttnews.com 24/02/15)

S. Korea’s consumer confidence goes upward for 2 months Confidence among South Korean consum-ers kept an upward trend for two months in a row, indicating a consumption recovery caused by fiscal and monetary stimulus. Composite consumer sentiment index stood at 103 for February, up 1 point from a month earlier, according to the Bank of Korea.

(www.xinhuanet.com 25/02/15)

Mauritius December trade deficit widens Mauritius’ foreign trade deficit in December widened from a year ago, as imports grew faster than exports. The visible trade deficit increased to MUR 9.1bn in December from MUR 8.6bn in the same month last year. In November, the shortfall was MUR 7.6bn. Exports grew 3.1% year-on-year and im-ports rose 4.3%. (www.rttnews.com 24/02/15)

Swiss market regulator says it is unlikely to probe HSBC further Switzerland’s financial markets regula-tor FINMA is unlikely to look into possible wrongdoing at HSBC’s Swiss private bank in the light of leaked information that was published this month. The publication of a trove of details on alleged tax evasion

by some of the bank’s wealthy clients has prompted investigations by Geneva’s public prosecutor and British authorities, as well as a possible US probe. (www.reuters.com 24/02/15)

South Africa GDP beats estimates South Africa’s economy, the continents sec-ond-largest, grew at a faster pace than econ-omists predicted in the fourth quarter after manufacturing and mining rebounded from a series of strikes. GDP increased an an-nualized 4.1% compared with the previous quarter, when it expanded a revised 2.1%. The economy grew 1.5% for the whole of last year, the slowest pace since a 2009 re-cession. (www.bloomberg.com 24/02/15)

Botswana’s local equities perform well Botswana Stock Exchange’s index of local companies continued to make impressive gains as leading stocks saw their share pric-es going up on the back of positive results. In its weekly stock market report released on Monday, stockbrokers reported that the Domestic Company Index advanced by 84 basis points on the back of strong gains from blue chip stocks. (www.xinhuanet.com 24/02/15)

Zenith Bank Ghana, The Banker magazine’s Best Bank in Ghana 2014, has crowned a prolific operating year by posting a profit before tax of more than GH₵200 million in 2014, equivalent to a growth of 86 percent over 2013 pre-tax earnings of GH₵107.7 mil-lion.

The Bank, which is often the first to kick-start the earnings reporting season, saw net interest income surge by 98 percent to GH₵261.9 million from GH₵132.5 million during the period. This was partly the re-sult of a 62 percent increase in the value of outstanding loans to customers, which rose from GH₵676.8 million to GH₵1.1 billion.Fees and commission income improved by 66 percent to GH₵63.7 million, and net trad-ing and other operating income remained

strong.Total operating income registered a 76 percent growth to GH₵357.9 million from GH₵203.8 million in 2013.After-tax profit rose by 87 percent to GH₵137.4 million, boosting the Bank’s re-turn on equity to 39.1 percent from 30.2 per-cent. Quite remarkably, the cost-to-income ratio stabilised at 40.7 percent.“This is yet another sterling performance on top of our record-setting 2013 results,” said Daniel Asiedu, Managing Director/Chief Ex-ecutive Officer of the bank. “The results un-derline the success of our strategy and the value of our brand,which together make us one of the strongest banks in the industry.”Being able to maintain rapid growth in a highly competitive environment, where the economic risks have risen in recent years, says much about Zenith’s underlying strength as a business, Mr. Asiedu said. “It also tells our customers that we will contin-ue to reinforce our financial strength in order to serve them better, while our shareholders can be assured that we’ll always pursue op-timal value for their investments,” he added.On balance sheet metrics, Zenith’s assets

ZENITH IN FOCUS

Zenith Bank crowns prolific 2014 with top- notch financials


expanded by 60 percent to GH₵3.1 billion from GH₵1.9 billion in 2013, while custom-er deposits grew by 73 percent to GH₵1.8 billion from GH₵1.1 billion. The Bank’s non-performing loans ratio inched up slight-ly to 6.9 percent from 4.7 percent, but re-mained below the industry average of more than 12 percent.

As it enters its tenth year of operation, Ze-nith Bank Ghana is clearly now the czar of innovation in the Ghanaian banking in-dustry, and continues to differentiate itself through a high service quality and the ability to serve a unique customer experience.Indeed, the Bank’s hallmark of excellent and unrivalled customer service is demonstrat-ed practically in each of its 29 business lo-cations nationwide, culminating in the Bank winning the Best Bank—Customer Care at the 2014 Ghana Banking Awards. As this

award was based on a survey of customers of all banks, it proved unequivocally that Ze-nith Bank’s customers are the most satisfied in the industry. Zenith was also voted the First Runner-up—Best Growing Bank on a log of 27 banks in recognition of its amazing run of growth over the years.

Arguably the biggest achievement of 2014 was being named the ‘Bank of the Year 2014’ in Ghana by The Banker magazine at its annual Bank of the Year Awards in the UK, regarded as the Oscars in the global banking industry.

Zenith Bank was honoured for delivering decent shareholder returns and meeting customer expectations through competi-tive products and services. These include a potpourri of electronic cards and payment platforms, specially-designed loan products

for different customer constituencies, and third-party payment services with various service providers, including eight domestic and international airlines.

Mr. Asiedu said customers deserve praise for aiding Zenith’s success through their loyalty, adding that the bank will remain a leader in all facets of banking in 2015 to en-hance customer satisfaction.

Zenith Bank Ghana is a subsidiary of Zenith Bank Plc of Nigeria, West Africa’s number one bank according to The Banker maga-zine. Zenith’s parent company is also one of the world’s top 300 banks and sixth in Africa. It is listed in Nigeria and the UK with subsidiaries in Ghana, The Gambia and Si-erra Leone as well as representative offices in China and South Africa.

Zenith Bank Ghana, The Banker magazine’s Best Bank in Ghana 2014, took its business relationship with the Chinese community to a historic new height on Saturday when it hosted a tea-tasting event in Accra to mark the 2015 Chinese New Year, also known as the Year of the Green Wood Sheep/Goat.

Working in partnership with the Chinese Embassy in Ghana, through the Economic and Commercial Counsellor’s Office of the Embassy and the Confucius Institute of the University of Ghana, the Bank pulled off a spectacular red-inspired event, featuring an ambience created by a sublime mixture of Zenith Bank’s red brand image with the symbolic red colour of the Chinese nation.Attendees included dignitaries from the Chi-

nese Embassy, led by Mrs. Sun Baohong, Ambassador of the People’s Republic of China to Ghana; officials of the Confucius Institute, led by the Director, Dr. Mei Meilian; representatives of the Chinese Chamber of Commerce; and other members of the Chi-nese community in Ghana.

There were song and dance performanc-es by students of the Confucius Institute, which led eventually to a beautiful climax during which one of the students gave an elaborate performance of the traditional Chinese tea-making process, after which all the guests were invited to taste the various types of Chinese tea that were available on the night. Speaking at the event, Mr. Daniel Asiedu, Managing Director/Chief Executive

Officer of Zenith Bank Ghana, described the Chinese community as “strategic partners” of the Bank, and said the aim of the tea-tast-ing event was to promote the Chinese tea culture in Ghana.

“The Chinese community has contributed significantly to the growth and development of this nation and by extension, to Zenith Bank Ghana. Therefore, we have recipro-cated by sponsoring Chinese Chamber of Commerce events over the years. This is because we consider the Chinese commu-nity in Ghana as strategic partners,” he said.“As a Bank, we have always believed that it is very important to be innovative in our collaborations not only to differentiate our-selves, but to add significant value to our customers and society in general. This year we deem it fit to celebrate the New Year with you by connecting with an aspect of your culture which you hold so dearly.”

Mrs. Sun Baohong, the Chinese Ambassa-dor to Ghana, praised Zenith Bank’s strong record of innovation and its sterling financial performance, saying that “Zenith Bank is a very renowned bank with serious people who do serious business.”She likened Zenith Bank’s rapid growth to the rapidly developing relations between Ghana and China, which saw bilateral trade

Zenith Bank marks chinese new Year with tea-tasting event


between the two countries rising to a new record of US$5.6 billion in 2014 and Gha-na’s exports to China growing by 20 percent to almost US$1.5 billion. She said China is looking forward to advancing its cooper-ation with Ghana in 2015 and that Zenith Bank can play a pivotal role in helping to realise this objective. Apart from the Bank’s ability to link the Chi-nese business community to its other cor-porate clients to open up new vistas of mu-tually beneficial partnerships, Mrs. Baohong

said Zenith Bank is also well placed to offer professional advice to Chinese companies on how to tap opportunities and manage the risks inherent in doing business in Ghana.Dr. Mei Meilian, Director of the Confucius In-stitute in Ghana, said the Institute seeks to promote Chinese culture and the teachings of Confucius, the country’s most revered philosopher. Zenith Bank’s tea-tasting event was therefore beneficial to the work of the Institute, she added. Currently the Best Bank in Customer Care in Ghana, Zenith

Bank Ghana is a subsidiary of Zenith Bank Plc of Nigeria, which The Banker magazine has ranked as the best bank in West Africa. Zenith Bank Ghana posted pre-tax earnings of GH₵200.1 million in 2014, equivalent to a growth of 86 percent over the 2013 outturn.Zenith Plc is in the world’s top 300 banks and sixth in Africa. It has listings in Nigeria and the UK with subsidiaries in Ghana, The Gambia and Sierra Leone and representa-tive offices in China and South Africa.

For thirty years, Johnson had arrived at work at 9:00am on the dot. He had never missed a day and was never late. Con-sequently, when on one particular day 9 A.M. passed without Johnson’s arrival, it caused a sensation. All work ceased, and the boss himself, looking at his watch and muttering, came out into the corridor.

Finally, precisely at ten, Johnson showed up, clothes dusty and torn, his face scratched and bruised, his glasses bent. He limped painfully to the time clock, punched in, and said, aware that all eyes were upon him, “I tripped and rolled down two flights of stairs in the subway. Nearly killed myself.”And the boss said, “And to roll down two flights of stairs took you a whole hour?”

theme for the month: You are the reason we

are inspiredcustomer service daY

tuesday march 3, 2015

Zenith calender for the month of march

Jokes corner

LIvE THE

ZENITH LIFE

Z-BUSINESS NEWS Monthly Bulletin - February 2015

Live the Zenith Life

12

FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014

The financial statements presented are an extract from the annual financial statements of the Bank for the year ended December 31, 2014. This information is extracted directly from the annual financial statements, which are available for inspection at the Bank's Head Office, Premier Towers, Liberia Road, Accra. The auditor's report was signed on January 30, 2015 and has been extracted from the annual financial statements of the Bank.

ZENITH BANK (GHANA) LIMITED

The Directors in submitting to the shareholders the financial statements of the Bank for the year ended December 31, 2014 report as follows:

Directors Responsibility StatementThe Bank's Directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards (IFRS), and in the manner required by the Companies Code 1963 (Act 179), the Banking Act, 2004 (Act 673) (As Amended) and for such controls as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.The Directors have made an assessment of the Bank's ability to continue as a going concern and have no reason to believe the business will not be a going concern.

Principal activityThe principal activity of the Bank is to provide banking and related services.

Parent companyThe bank is a subsidiary of Zenith Bank PLC, a bank incorporated in the Federal Republic of Nigeria.

Approval of the Financial StatementsThe financial statements of the Bank were approved by the Board of Directors on January 30, 2015 and were signed on their behalf by

The accompanying statements of financial position, comprehensive income, and cash flows are derived from the audited financial statements of Zenith Bank (Ghana) Limited for the year ended 31 December 2014. We expressed an unmodified opinion on the financial statements in our report dated 30 January 2015.

The accompanying statements of financial position, comprehensive income and cash flows do not contain all the disclosures required by International Financial Reporting Standards and in the manner required by the Companies Act of Ghana, 1963 (Act 179) and the Banking Act of Ghana, 2004 (673) as amended by the Banking Amendment Act of Ghana, 2007 (Act 738) applied in the preparation of the audited financial statements of the Bank. Reading the accompanying statements of financial position, comprehensive income and cash flows, therefore, is not a substitute for reading the audited financial statements of the Bank.

In our opinion, the accompanying statements of financial position, comprehensive income and cash flows are consistent, in all material respects, with the audited financial statements of Zenith Bank (Ghana) Limited for the year ended 31 December 2014, from which they were derived.

Signed by: Nathaniel D. Harlley (ICAG/P/1056)For and on behalf of:KPMG: (ICAG/F/2014/038)CHARTERED ACCOUNTANTS13 YIYIWA DRIVE, ABELENKPEP O BOX GP 242ACCRA

January 30, 2015

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ZENITH BANK (GHANA) LIMITED

STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31

2014GH¢

Interest income 393,202,759 181,418,945

Interest expense (131,298,063) (48,913,519)

Net interest income 261,904,696 132,505,426

Fees and commission 63,675,595 38,474,004

Net trading income 29,772,106 30,895,305

Other operating income 2,529,218 1,925,547

Net trading and other income 95,976,919 71,294,856

Total operating income 357,881,615 203,800,282

Impairment loss on financial assets (11,983,954) (13,436,036)

Personnel expenses (47,573,092) (29,509,518)

Depreciation and amortization (6,104,842) (5,293,501)

Other expenses (92,091,689) (47,862,017)

Profit before income tax 200,128,038 107,699,210

Taxation (62,727,973) (34,088,394)

Profit after tax attributable to equity holders

of the Bank 137,400,065 73,610,816

Other comprehensive income

Exchange Gains on currency swap derivative valuation - 39,390,193

Related tax - (9,847,548)

Other comprehensive income, net of tax - 29,542,645

Total comprehensive income attributable to equity

holders of the Bank 137,400,065 103,153,461

Earnings per share - Basic & Diluted 0 22 0.12

2013GH¢

2014GH¢

2013GH¢Assets

Cash and cash equivalents 614,271,326 398,505,863

Government securities 1,282,388,881 773,534,307

Derivative assets held for risk management 8,548,883 39,390,193

Loans and advances to customers 1,097,357,356 676,782,866

Property and equipment 13,076,471 13,332,982

Leasehold property 4,745,422 4,842,207

Intangible assets 2,279,246 170,603

Deferred tax assets 2,162,447 -

Other assets 48,529,183 14,067,125

Total assets 3,073,359,215 1,920,626,146

Liabilities

Due to other banks 820,073,650 571,400,154

Deposits from customers 1,846,745,159 1,066,493,105

Other liabilities 28,264,175 22,996,434

Tax payable 26,832,697 7,450,190

Deferred tax liabilities - 8,700,149

Total liabilites 2,721,915,681 1,677,040,032

Equity

Stated capital 61,221,496

Statutory reserve 62,551,300

Credit risk reserve 7,498,587

Hedging reserve - 29,542,645

Retained earnings 183,125,050 82,772,086

Total Equity 351,443,534 243,586,114

Total equity and liabilites 3,073,359,215 1,920,626,146

61,221,496

79,726,308

27,370,680

Profit after tax 137,400,065 73,610,816

Adjustments for:

Depreciation and amortization 6,104,842 5,293,501

Net impairment loss on financial assets 11,98

Net interest income (261,904,696

Profit on disposal of property equipment (71,657

Associated company balance written off - 26,351

Asset write-off 1

(43,743,075

Changes in:

Government securities (275,891,749)

GH¢2013GH¢

) (132,505,426)

) (281,259)

232,709

) (6,098,878)

(543,365,892)

)

2014

3,954 13,436,036

6,444

Loans and advances to customers (432,132,313

Other assets (34,462,058

Due to other banks 248,673,496 560,557,660

Customer deposits 780,252,054 285,808,863

Other liabilities 5,26

247,964,096

Interest received 393,20

Interest paid (131,298,063

Taxes paid (44,360,514

Net cash flow from operating activities 465,508,278

Cash flow from investing activities

Acquisition of property and equipment (5,260,809

Proceeds from disposal of property and equipment 146,190 659,417

Acquisition of leasehold property

Acquisition of intangible assets (2,690,357

Net cash flow used in investing activities (7,804,976

Net cash flows from financing activities

Net increase in cash and cash equivalents 457,703,302

Balance at beginning 528,694,121

Cash and cash equivalents at 31 December 986,397,423

Effect of exchange rate fluctuations on cash and cash

equivalents held (8,975,014

Cash and bank balances

Cash balances

) (357,669,565

)) (7,206,668

10,682,825

(57,291,655)

) (48,913,519)

) (28,293,600)

46,920,171

) (7,555,973)

(2,029,300)

) (53,754)

) (8,979,610)

- -

496,962,054

) (6,208,494)

528,694,121

398,505,863

7,741

2,759 181,418,945

-

37,940,561

534,902,615

977,422,409

614,271,326

NOTES TO THE FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS TO THE MEMBERS OF ZENITH BANK (GHANA) LIMITED

1. Reporting entityZenith Bank (Ghana) Limited (the Bank) is a bank incorporated in Ghana. The address of the Bank's registered office is Premier Towers, Liberia Road, PMB CT 393, Accra. The financial statements of the Bank as at, and for the year ended December 31, 2014 are as stated in this report. The Bank is a subsidiary of Zenith Bank PLC of Nigeria. The Bank operates with a universal banking license that allows it to undertake all banking and related services.

2. Basis of accountingThe financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). They were authorised for issue by the board of directors on January 30, 2015. Details of the Bank's accounting policies are included in Note 40.

3. Functional and presentation currencyThese financial statements are presented in Ghana Cedi, which is the Bank's functional currency.

4. Use of judgements and estimatesIn preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Bank's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

5. Basis of measurementThe financial statements have been prepared on a historical cost basis except for the following material items.

6. Changes in accounting policiesExcept for the changes below, the Bank has consistently applied the accounting policies as set out in Note 40 to all periods presented in the financial statements.

7. Significant accounting policiesThe principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

8. Risk ManagementAs a bank, risk is at the core of our operations. To manage it, we have designed a Risk Management Framework covering the strategic framework, organizational structure, risk appetite, operational framework and risk monitoring and reporting.

The relevant key ratios during the year include: 4.38% Loan loss provision ratio of (2013: 5.40%) Percentage of gross non-performing loans with respect to Bank of Ghana Prudential Norms (specifically impaired) to total gross loans and advances is (2013: 4.70%) 6.91% 81% Ratio of fifty (50) largest exposure (gross funded and non funded) to total exposure of (2013: 86%) 14.08% Capital adequacy ratio of (2013: 15.74%)

Measurement basis

Non-derivative financial instruments at fair value through profit or loss

Fair value

Derivative financial instruments Fair value

Recognised financial assets and financial liabilities designated as hedged items in qualifying fair value hedge relationships

Amortised cost adjusted for changes in fair value attributable to the risk being hedged

Items

Signed: Daniel Asiedu (Managing Director/CEO)

Signed: Henry Benyah (Director)

Tax expense 62,727,973 34,088,394

Short-term investments 130,188,258363,151,083

Cash and cash equivalents at 31 December 528,694,121977,422,409

Zenith bank february newsletter 2015

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