As has been the case in recent times, sustenance of macroeconomic stability remained the fulcrum of government policies during the financial year 2006/2007, even as it continued with the ongoing economic and financial reforms. Thus, the focus of monetary and fiscal policies was the achievement and sustenance of low inflation and stable exchange rates as well as declining Interest rates. And, by year-end 2006, not only was the exchange rate stable, the national currency recorded some appreciation against the dollar and other major currencies. Average exchange rate which stood at N133.00 to US$ in 2005, closed year 2006 at N129.00 to the US$ and had hit N127.00 to US$ by our financial year end in June, 2007.

Similarly, inflation rate (year-on-year) dropped by more than half, from 17.80 per cent at end-December, 2005 to 8.20 per cent in December 2006; it has further declined to 6.40 per cent by end-June, 2007. Also, interest rate volatility was checked during the period under review by the introduction of Monetary Policy Rate (MPR) in December 2006 as a replacement for the Minimum Rediscount Rate (MRR). The new nominal anchor interest rate (MPR) introduced by the Central Bank of Nigeria has been reviewed downward from 10 per cent at take-off to 8.00 percent in June, 2007. The MPR has so far, moderated interest rates within the CBN's lending and deposit standing facility rates.

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All these, In the main, accounted for the relative stability in the economy, despite some liquidity surge occasioned by huge capital injections during the second half of our financial year when the general elections and change of government took place. A concomitant of this development was the continued improvement in the inflow of both portfolio and foreign direct investment (FDI) during the review period-amounting to about US$7Biliion in 2006. Following continued high and rising crude oil prices, official external reserves (at end-December, 2006) stood at US$41.96 billion, compared with US$28.30 billion recorded at end-December, 2005. In spite of Nigeria's exit payment to the Paris Club and London Club of creditors, the official reserves amounted to US$44 billion as at the end of the period under review.

The exit from the protracted debt trap has since started freeing up funds for investment in other sectors of the economy. In fact, Nigeria's external debt (US$3 billion) to Gross Domestic Product (GDP) ratio as at end-June 2007 was only four per cent, which is much below the critical ratio of 45 per cent. Also, during the period under review, and for the second time in two years, both Fitch and Standard & Poor's (S & P), two international rating agencies, awarded BB- to Nigeria-describing her economy as "stable". All these have, no doubt, further brightened the investment horizon of the country.

The consolidation of the financial services sector assumed increased tempo during the review period, with the recapitalization exercise in the insurance sub-sector which began in September 2005, closing end February 2007. Seventy-one operators, comprising 43 non-life, 26 life and two reinsurance companies emerged from the exercise which resulted in the injection of a whopping N170 billion fresh equity funds into the industry.

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In the banking sub-sector, market-induced consolidation which began early in 2006, intensified during the period under review, with a number of banks resorting to raising more money through hybrid public offers in the capital market. Others embarked on fresh merger and acquisition propositions. A few of these arrangements are yet ongoing, and we foresee the sustenance of the consolidation trend.

In the capital market, activity remained upbeat in both the primary and secondary segments all through the review period as a result of the improved economic condition of the nation, profit-taking and stock switching by investors. Also, the overall macroeconomic stability and improved corporate results caused significant rise in stock prices. Recapitalization in the insurance industry and market-induced consolidation in the banking sector led to an avalanche of new and supplementary issues. Thus, market capitalization which stood at N3.65 trillion at end-June, 2006, hit N5.12 trillion at year-end 2006, and rose to N7.82 trillion at end-June 2007.

It is heart-warming to note that your bank, Zenith Bank Plc, played a significant role in driving the brilliant performances of the stock market during the period under review. This culminated in your bank emerging as the most capitalized quoted company on the Nigerian Stock Exchange at the close of our financial year, with a market capitalization of N612.82 billion. The bank also led the banking sector as the highest priced stock, at N66.14 per share as at the close of trading in June 2007.

As has become the tradition for your Bank, it won a number of prestigious awards, locally and internationally during the period under review. Not only did it consolidate existing laurels, it was also voted the "Most Socially Responsible Company in Nigeria" under ThisDay Award for Excellence. And, as another affirmation of its unparalleled customer service quality, Zenith Bank was adjudged the "Most Customer-focused Bank in Nigeria" following the outcome of a survey by KPMG.

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Even in the face of the heightening competition in the financial services sector sequel to the reforms, your bank and its subsidiaries have continued to surpass performance projections. Thus, the financial results of the Group for the 2006/2007 financial year show significant appreciation in all parameters. These results once again bear eloquent testimony to the all-round sound financial health of members of the Group as well as their top-notch places in their focus areas.

For the bank, profit before tax was N23.29blllion, representing a 54 per cent increase over the figures reported for last year. Gross earnings increased by 53 per cent over the figures for the previous year to hit N89.19 billion. Total assets plus contingents rose to N1, 178.39 billion, a substantial leap from the figures for last year. Total deposit grew 45 per cent to N568.01 billion while shareholders' funds rose to N112.83 billion, showing 12 per cent growth over the last financial year's figure.

In Group terms, the performance indicators also recorded quantum leap. The Group's gross earnings rose by 58.1 per cent to stand at N94.88 billion, while profit before tax leaped by 64.70 percent from N15.59 billion last year to N25.68 billion. Similarly, the Group's total assets plus contingents hit N1, 270.96 billion from its level of N776.03 billion in the previous year.

In furtherance of our commitment to delivering superior shareholder value, we will once again demonstrate our very friendly dividend policy by ensuring that a reasonable chunk of our profit is in the hands of our investors. This is apart from the quantum capital gains that had already accrued to our teeming investors, owing to the superb performance of our stock in the market.

The Board is therefore pleased to recommend a dividend of N9, 265.52 billion; that is, 100 kobo per 50 kobo share. In addition, the Board is recommending the capitalization of N1, 158.19 billion from the general reserve account for bonus issue, in proportion of one new share for every four shares currently held.

Our strategic growth and expansion drive continued with increased zeal during the period under review, leading to more subsidiaries and further spreading of our branches and franchise across the country as well as offshore. Our branch network now goes beyond state capitals, the FCT Abuja and major towns and cities in the country.
In fact, Zenith Bank scored 'another first' during the review period, when it opened a wholly-owned subsidiary, Zenith Bank' (UK) Limited in London. It obtained the banking license from the UK Financial Services Authority (FSA) after meeting very stringent requirements; thus, it became the first Nigerian bank to be granted license to set up a bank in the United Kingdom.

Your bank has also opened a functional representative office in Johannesburg, South Africa. We can assure you that this growth and expansion effort will be sustained in the years ahead in our determined strategic moves to play as a reputable global financial institution.

May I, at this juncture, thank our teeming valued customers for their continued patronage and unwavering loyalty to the Zenith brand. Without your invaluable contribution and support, the excellent results on our hands could not have been possible. Emboldened by this level of success and implicit confidence in our pedigree, we can assure you that more than ever before, we will continue to render to you unparalleled premium service.

In this regard, we have further honed and fine-tuned our ICT infrastructure to deliver our bouquet of service offerings in a fashion that beats customer expectations. We have also further strengthened the arrangement for more meaningful interactions and engagements with all our stakeholders. We will continue to evolve methods and strategies to assess and decipher your needs and aspirations to enable us deliver financial solutions that elicit your enthusiasm and surpass your expectations.

At this meeting, the following directors will retire by rotation in line with the bank's Article of Association and being eligible for re-election, they have offered themselves for re-election. They are Apollos Ikpobe, Peter Amangbo, Elias Igbin-Akenzua and Sir Fortune Ebie.

Also, in the course of the year, there were new appointments to the Board of Directors. Messrs Udom Emmanuel and Andrew Ojei joined the board as Executive Directors while Alhaji Baba Tela was appointed a Non-Executive Director. They will be bringing on board their wealth of experience in their various fields of endeavour. While I welcome them on board, I urge you to kindly approve their appointment.

Dear shareholders, permit me to restate the obvious that our staff are really the pivot on which the bank's activities revolve. This is why we have continued to place unquantifiable premium on staff quality and welfare. As a tradition, we have continued to attract and retain some of the best talents in the banking industry in Nigeria-even from outside our shores. Concomitantly, we have also maintained a highly motivating work environment and welfare package that conduce to one of the lowest staff turnover rates in the industry.

Going forward, we will continue to sustain the enabling environment that makes for continued development of management and staff talents and skills, self actualization as well as the accomplishment of corporate objectives. On behalf of the Board of Directors and Shareholders, may I express our gratitude to management and staff of the bank for their unrelenting dedication and service. I urge you to remain steadfast.

Dear shareholders, I can say with every sense of pride and satisfaction that Zenith Bank has performed very well in the 200612007 financial year and is poised to do even better in the future. This optimism is founded on our consistent excellent track record for which we have continued to win laurels from within and outside the country. The bright future prospect is also founded on the subsisting macroeconomic stability in Nigeria-a reality that has attracted markedly improved country risk ratings forthe country in the past couple of years.

Let me also assure you that as a bank, as the market-induced consolidation and competition intensifies, we will continue to reinvent ourselves and our systems to effectively tackle the unfolding challenges. With the advance we have made with the Zenith brand into some key financial centres of the world, we are determined more than ever before to remain a global player. We are mindful of the demands and obligations that go with this; which is why we are entrenching global best practices in every facet of our operations. We also ensure that all these are founded on the tenets of good corporate governance.

There is no doubt that our local environment throws up some challenges, especially from the Niger Delta issue; but we believe those challenges are quite surmountable. The successful change of government at all levels last May, sequel to a general election, is indicative of the future that we can all face with hope. Also, the strides by the various relevant regulatory and supervisory authorities in recent times are further impetus to greater optimism about the days ahead. I can therefore say with aplomb, once again, that the future is very bright!