ZENITH BANK (GHANA) LIMITED

Profit after taxAdjustments for:Depreciation and amortizationNet impairment loss on financial assetsNet interest incomeProfit on disposal of property and equipmentAsset write-offTax expense

Changes in:Investments (Other than securities)InvestmentsLoans and advances to customersOther assetsBorrowingsCustomer depositsOther liabilities

Interest receivedInterest paidTaxes paidNet cash flow from operating activitiesCash flow from investing activitiesAcquisition of property and equipmentProceeds from disposal of property and equipmentAcquisition of intangible assetsNet cash flow used in investing activities

Net increase in cash and cash equivalentsBalance at beginningCash and cash equivalents at 31 DecemberEffect of exchange rate fluctuations on cash and cash equivalents heldCash and bank balances

Cash balancesShort-term investmentsCash and cash equivalents at 31 December

2016GH¢

140,265,212

8,835,47013,026,463

(262,836,341)(904,229)

78,81562,324,342

(39,210,268)

(292,677,000)69,959,575

(32,931,674)(28,770,387)

85,025,696627,866,376

2,701,224391,963,542437,250,172

(174,413,831)(53,184,324)601,615,559

(46,228,553)1,627,142

(1,025,036)(45,626,447)

555,989,1121,293,661,1821,849,650,294

(10,318,850)

1,839,331,444

808,017,8051,031,313,6391,839,331,444

2015GH¢

83,076,943

6,771,29454,517,824

(276,187,598)(188,498)

-32,003,197

(100,006,838)

-799,910,748

59,765,1013,689,319

(794,948,016)163,332,813

16,577,760148,320,887447,872,621

(171,685,023)(70,896,831)353,611,654

(79,555,633)245,480

(1,175,650)(80,485,803)

273,125,851977,422,409

1,250,548,26043,112,922

1,293,661,182

691,726,903601,934,279

1,293,661,182

Balance as at 1 January 2015Profit for the year

Other comprehensive income,net of taxRegulatory and other reservestransfersTransfer from credit risk reserveTransfer to statutory reserveNet transfers to/(from) reserves

Balance at 31 December 2015

Balance at 1 January 2016Profit for the year

Other comprehensive income,net of taxRegulatory and other reservestransfersTransfer to credit risk reserveTransfer to statutory reserveNet transfers to/(from) reserves

Balance at 31 December 2016

Stated Capital

GH¢

61,221,496-

-

- - -

61,221,496

61,221,496-

-

- -

-

61,221,496

StatutoryReserve

GH¢

79,726,308-

-

-10,384,61810,384,618

90,110,926

90,110,926-

-

-17,533,15217,533,152

107,644,078

Credit riskReserve

GH¢

27,370,680-

-

(4,535,245)-

(4,535,245)

22,835,435

22,835,435-

-

3,486,579 -

3,486,579

26,322,014

RetainedEarnings

GH¢

183,125,05083,076,943

-

4,535,245(10,384,618)

(5,849,373)

260,352,620

260,352,620140,265,212

-

(3,486,579)(17,533,152)(21,019,731)

379,598,101

TotalGH¢

351,443,53483,076,943

-

- - -

434,520,477

434,520,477140,265,212

-

- - -

574,785,689

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER

FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016

Assets

Cash and cash equivalentsInvestmentsInvestments (other than securities)Loans and advances to customersCurrent tax assetsProperty and equipmentIntangible assetsDeferred tax assetsOther assetsTotal assets

Liabilities

BorrowingsDeposits from customersDeposits from banks and other financial institutionsOther liabilitiesTotal liabilities

Equity

Stated capitalStatutory reserveCredit risk reserveRetained earningsTotal equity

Total equity and liabilities

2016GH¢

808,017,8051,080,681,114

292,677,0001,012,054,694

855,185130,061,809

1,558,7284,228,181

73,610,2513,403,744,767

110,151,3302,637,944,348

33,320,24047,543,160

2,828,959,078

61,221,496107,644,07826,322,014

379,598,101574,785,689

3,403,744,767

2015GH¢

691,726,903721,261,329

-983,074,431

6,174,20491,924,8992,079,2478,049,180

44,839,8642,549,130,057

25,125,6342,010,077,972

34,564,03844,841,936

2,114,609,580

61,221,49690,110,92622,835,435

260,352,620434,520,477

2,549,130,057

Interest incomeInterest expenseNet interest income

Fees and commissionNet trading income/(loss)Other incomeNet trading and other income

Revenue

Impairment loss on financial assetsPersonnel expensesDepreciation and amortizationOther expenses

Profit before income tax

Income tax expenseProfit after tax attributable to equity holdersOther comprehensive income, net of tax

Total comprehensive income attributable to equity holders of the Bank

2016GH¢

437,250,172(174,413,831)

262,836,341

63,674,64031,371,7163,204,058

98,250,414

361,086,755

(13,026,463)(61,270,606)(8,835,470)

(75,364,662)

202,589,554

(62,324,342)140,265,212

-

140,265,212

2015GH¢

447,872,621(171,685,023)

276,187,598

64,859,675(40,842,007)

2,685,82326,703,491

302,891,089

(54,517,824)(58,233,265)(6,771,294)

(68,288,566)

115,080,140

(32,003,197)83,076,943

-

83,076,943

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER

ZENITH BANK (GHANA) LIMITED

FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2016

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.

Basis of accountingThe financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies Act, 1963 (Act 179) and the Banking Act, 2004 (Act 673) as amended by the Banking Amendment Act, 2007 (Act 738). They were authorised for issue by the board of directors on January 27, 2017.

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

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.

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

Significant accounting policiesThe principal accounting policies applied in the preparation of these condensed financial statements are consistent with the accounting policies applied in the audited financial statement of the bank. These policies have been consistently applied to all the years presented, unless otherwise stated.

Risk ManagementThe Bank’s activities expose the business to risks. The Bank has exposure to the following types of risks: credit risk, liquidity risk, market risk and operational risk. These risks are managed professionally and in a targeted manner. The Bank’s risk management policies are established to identify and analyze risks faced by the Bank, set appropriate risks limits and controls as well as monitor these risks and adherence to established policies. Risk management policies and systems are reviewed regularly to reflect changes in market conditions, products and services offered.

Measurement basis

Non-derivative financial instruments atfair value through profit or loss

Fair valueDerivative financial instruments Fair value

Recognised financial assets and financialliabilities designated as hedged items inqualifying fair value hedge relationships`

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

Items

1.

2.

3.

4.

5.

6.

7.

NOTES TO THE FINANCIAL STATEMENTS

The Directors in submitting to the shareholders the financial statements of the Bank for the year ended 31 December 2016 report as follows:

Directors' Responsibility StatementThe Bank’s Directors are responsible for the preparation of the financial statements that give a true and fair view of Zenith Bank (Ghana) Limited, comprising statement of financial position at 31 December, 2016 and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and the notes to the financial statements which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act, 1963 (Act 179), and the Banking Act, 2004 (Act 673) as amended by the Banking Amendment Act, 2007 (Act 738). In addition, the directors are responsible for the preparation of directors' report.

The Directors are also responsible for such internal control 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, and for maintaining adequate accounting records and an effective system of risk management.

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.

The auditor is responsible for reporting on whether the financial statements give a true and fair view in accordance with the applicable financial reporting framework.

Nature of BusinessThe Bank is authorised by Bank of Ghana to carry on the business of universal banking.

Holding CompanyThe Bank is a subsidiary of Zenith Bank Plc, a company incorporated in the Federal Republic of Nigeria and licensed to undertake all banking and related services.

Approval of the Financial StatementsThe financial statements of the Bank, as identified in the first paragraph, were approved by the board of directors on 27 January 2017 and were signed on their behalf by:

.......................................………...... ……....….............…………… Henry Oroh Mary Chinery-Hesse (Mrs.) (Managing Director/CEO) (Chairman)

REPORT OF THE DIRECTORS

2016 GH¢

532,296,528(248,922,360)

283,374,1683,204,058

(13,026,463)

273,551,763

(856,133)(868,970)

(60,401,636)62,126,739

(62,324,342)

-

(8,835,470)(140,265,212)

2015 GH¢

471,890,289(239,145,604)

232,744,6852,685,823

(54,517,824)

180,912,684

(827,985)(1,667,295)

(56,565,970)59,061,250

(32,003,197)

-

(6,771,294)(83,076,943)

VALUE ADDED STATEMENT FOR THE YEAR ENDED 31 DECEMBER

To the Members of Zenith Bank (Ghana) Limited

OpinionThe condensed financial statements, which comprise the statement of financial position at 31 December 2016, and the statements of comprehensive income, changes in equity and cash flows for the year then ended and related notes, are derived from the audited financial statements of Zenith Bank (Ghana) Limited for the year ended 31 December 2016. In our opinion, the accompanying condensed financial statements are consistent, in all material respects, with the audited financial statements, in accordance with the basis described in the notes. Condensed Financial StatementsThe condensed financial statements do not contain all the disclosures required by International Financial Reporting Standards and in the manner required by the Companies Act 1963, (Act 179) and the Banking Act, 2004 (Act 673) as amended by the Banking Amendment Act, 2007 (Act 738) applied in the preparation of the audited financial statements of Zenith Bank (Ghana) Limited . Reading the condensed financial statements and our report thereon, therefore, is not a substitute for reading the audited financial statements and our report thereon. The condensed financial statements and the audited financial statements do not reflect the effects of events that occurred subsequent to that date of our report on the audited financial statements.

The Audited Financial Statements and Our Report ThereonWe expressed an unmodified audit opinion on the audited financial statements in our report dated 27 January 2017.

Directors' Responsibility for the Condensed Financial StatementsThe directors are responsible for the preparation of the condensed financial statements in accordance with the basis described in the notes.

Auditor's ResponsibilityOur responsibility is to express an opinion on whether the condensed financial statements are consistent, in all material respects, with the audited financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810 (Revised), Engagements to Report on Summary Financial Statements.

The engagement partner on the audit resulting in this independent auditor's report is Nathaniel D. Harlley (ICAG/P/1056).

For and on behalf of:KPMG: (ICAG/F/2017/038)CHARTERED ACCOUNTANTS13 YIYIWA DRIVE, ABELENKPEP. O. BOX GP 242ACCRA

February 28, 2017

INDEPENDENT AUDITOR'S REPORT

.................................................

Quantitative Disclosures

Capital adequacy ratioNon-performing loans to Gross loansLoan loss provisionLiquid Ratio

2016%

21.9810.629.70146

2015%

18.7210.489.63112

Interest earned and other operating incomeDirect cost of services and other costs

Value added by banking servicesNon-banking incomeImpairments

Value added

Distributed as follows:

To employeesDirectors (without executives)Executive DirectorsOther employeesTotal

To GovernmentIncome tax

To providers of capitalDividends to shareholders

To expansion and growthDepreciation and amortizationRetained earnings