The uncertainty unleashed on the global economy by the financial and economic crisis that set in late 2007 sequel to the collapse of the sub-prime lending market in the United States continued into the period under review. Most national economies faced sharp downward spiral while some went into economic recession. Economies worldwide slowed for most part of this period as credit tightened, unemployment soared and international trade declined. Banks' solvency came under question as credit crunch prevailed, with weak investor confidence all impacting on global stock markets, which suffered huge losses during late 2008 and better part of 2009.

However, national governments, global financial institutions and central banks have been responding with unprecedented stimulus packages, expansionary monetary and fiscal policies, and institutional bailouts; thus, reducing uncertainty and systemic risk in the financial system.

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By the second half of 2009, the recession in the United States and some other major economies in Europe and Asia had begun to recedeleading to considerable optimism by the end of the year. In its World Economic Outlook (WEO), October 2009 edition, the International Monetary Fund (IMF) asserted that the global economy appeared to be expanding, pulled up by the strong performance of Asian economies and modest recovery in other parts of the world. It added that growth in most advanced economies was dependent on government stimulus packages.

Also, an IMF research note released on December 30, 2009, attributed the recovery of some economies to commodity price increases, noting that those prices would rise further in 2010 as world economic activities expand after the unprecedented global crisis.

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As noted by the International Monetary Fund in its October 2009 Regional Economic Outlook (REO) on the region, the global economic crisis had hit Sub-Saharan Africa hard, reducing the economic growth of the region to just one per cent in 2009 after a period of sustained growth. The recession has also slashed the exports of many Sub-Saharan African countries and disrupted capital flows.

However, in many of these countries, prudent macroeconomic policies pursued in recent times have provided some counterpoise to the negative effects of the slowdown. Accordingly, most of the countries have been able to use a mix of fiscal (raising public spending) and monetary policies (stimulus packages) to stem the recessionary pull, and put their economies on the path of recovery.

Furthermore, the IMF notes that the budding recovery in the global economy is expected to sustain the revival in Sub-Saharan Africa's growth. We share in this optimism.

In the fifteen months under review, the Nigerian economy operated under the direct and indirect effects of the global financial crisis and efforts to curtail and contend with them. The reduction in the country's foreign currency earnings, occasioned by a falling oil price, led to a weakening exchange rate. Also, owing to the crash of share prices the market capitalization of the Nigerian Stock Exchange dropped by over 50 per cent. Government on its part came up with a number of stimulus packages, along with fresh initiatives on banking sector reform. In all this, sustaining macro-economic stability with some modicum of growth was at the core of economic policies.

This translated to fiscal and monetary polices of government focusing on reducing the rate of inflation, ensuring exchange rate stability and reducing interest rates. However, mixed results were achieved in these regards. While the exchange rate deteriorated markedly, the inflation targets were almost met. Thus, the average exchange rate of the Naira against the US dollar, in the face of the foreign exchange challenges of the period, depreciated from N 116.02/US$1 as at end-September 2008 to N 130.75/US$1 at end-December 2008 and further to N147.60/US$1 as at end-December 2009. On the other hand, inflation rate (year-on-year) which stood at 13.0 per cent as at end-September 2008, closed the year at 15.10 but decelerated to 12.0 per cent at end-December 2009.

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In Gross Domestic Product (GDP) terms, the economy which grew at a rate of 5.98 per cent in 2008 (as against 9.8 % target), achieved a projected figure of 6.90 per cent in 2009 (a rise of almost one per cent), according to preliminary estimates of the National Bureau of Statistics. This is slightly below the 7.50 per cent target for 2009. This growth trend was driven by a number of factors, including favourable revenue inflow during the second half of 2009 arising in part from high crude oil prices in the international market. From a level of US$41 .12 per barrel in January 2009, the average crude price rose to about US$70.00 per barrel at end-June 2009; hitting US$80.00 at the close of the year. There was also improved oil production during the second half of the year due in part to the relative peace in the Niger Delta region sequel to the success of the government amnesty programme. Other sectors that contributed to the growth during the period include agriculture, wholesale and retail trade as well as telecommunications.

During the period under review, Fitch Ratings maintained the BB- Sovereign Rating it assigned the country in May 2008. The new rating released in July 2009 stated that Nigeria obtained a sovereign rating of BB- as in the previous assessment. The local currency rating was also maintained at BB-, reflecting the impressive development of the domestic debt market in recent years. The report noted that debt market accounts for about 90 per cent of public debt and since late 2008, has extended maturities up to 20 years. On its part, Standard and Poor's (S & P) lowered Nigeria's rating outlook from stable to negative.

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In the banking sector, the Central Bank of Nigeria embarked on a number of reform initiatives to improve corporate governance, reporting, transparency and risk management in the deposit money banks. The apex bank also intended to influence the cost and availability of credit and asset prices as well as encourage the flow of credit to productive investments. In influencing interest rates, money supply and inflation, the apex bank severally adjusted the Monetary Policy Rate (MPR) and other variables during the period under review. It reduced the MPR from 9.75 per cent at end-September 2008 to 8.00 per cent in March 2009; and further to 6.00 per cent in June 2009 at which it closed the year. It similarly altered the cash reserve ratio (CRR) and the liquidity ratio, among others "to lubricate the system".

In the capital market, the impact of the global economic meltdown and developments in the local environment foisted a downward movement on all indicators of the market. The Nigerian Stock Exchange (NSE) All-share Index (ASI) dropped by 33.8 per cent to close at 20, 827.17 points in 2009. The Index had in 2008 dropped by 45.8 per cent to close at 31 , 450.78 points. This performance reflects a significant reduction in the prices of equities during the period under review. In the same vein, the market capitalization of the Exchange dropped by 26.50 per cent, from N9.56 trillion to stand at N7.03 trillion at end-December 2009. It had in 2008 declined by 28.1 per cent.

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Some of these awards include: 'Best Bank in Private Banking in Nigeria 2009' by The Euromoney Magazine; 'Best Global Banking Champion' Thisday Award of Excellence (2009), 'Most Customer-Focused Bank 2008' by KPMG; 'Bank of the Year 2008' by ThisDay Newspaper; 'Best Global Bank in Africa 2008' by African Banker Awards, among others.

In the face of the very challenging environment during the period under review, Zenith Bank continued to post very impressive performance. Although there was a decline in a few performance parameters, the financial results of the Group for the fifteen months ended December 31,2009, are yet a proof of the durability and resilience of the Zenith Brand. These results are also an eloquent testimony to the continued sound financial health of the Group. For the bank, gross earning was N254.20 billion, representing a 34 per cent increase over last year's figure of N 190.12 billion. Profit after tax stood at N 18.37 billion as at end-December 2009. Total assets declined slightly to N1.57 trillion, from Nl.68 trillion of the previous year. Also, total deposits dropped marginally to N 1.11 trillion in the period under review, from Nl .16 trillion in 2008; while shareholders' fund stood at N328.38 billion in 2009, from N33848 billion in 2008.

As a Group, the performance indices were no less cheering. Thus, the Group gross earnings rose 31 per cent, from N211.64 billion in 2008 to N277 .30 billion in 2009. Profit after tax for the Group stood at N20.60 billion during the period under review. Group total deposit dropped by one per cent, from N 1.188 trillion in 2008 to N 1.173 trillion in 2009; while the Shareholders' fund slipped marginally from N346.62 billion in 2008 to N337.79 billion in 2009. Group total assets stood at N 1.659 trillion in 2009, a slight drop from its Nl.787 trillion in 2008.

We remain committed to delivering superior returns to our shareholders; and this, we once again demonstrate by ensuring that a major part of our profit is set aside for our valued investors. The Board is therefore pleased to recommend a dividend payout of N 11.30 billion; that is, 45kobo per 50 kobo share. The Board is also proposing a bonus of one for every four shares.

In spite of the very challenging environment that prevailed during the period under review, the Bank also made modest effort in driving both its onshore and offshore expansion; thus, further spreading our branches and franchise across the country and beyond. In this regard, in addition to the already existing Zenith Bank (UK) Limited in London, Zenith Bank (Ghana) Limited and Zenith Bank (Sierra Leone) Limited, we opened another subsidiary in The Gambia during the period under review. Our representative office in Johannesburg, South Africa remains fully functional.

May I, at this juncture, express our inestimable gratitude and indebtedness to our teeming valued customers for their unalloyed support, continued patronage and unwavering loyalty to the Zenith brand. Really, your unparalleled contribution and consistent support remains the major contributor to the sterling results that we have continued to turn in as a bank. We will continue to invest in our people and upgrade our ICT infrastructure in order to continue to deliver financial solutions that elicit your enthusiasm and surpass your expectation.

My dear colleagues on the Board, I feel honoured to use this opportunity to express my gratitude to you for your support and wonderful ideas and contributions. You are in deed colleagues of inestimable value. In line with the Bank's Article of Association, at this meeting, the following directors will retire by rotation and being eligible for re-election, they have offered themselves for re-election. They are Mr. Macaulay Pepple, Chief E.M. Egwuenu, Mr. Babatunde Adejuwon and Sir. S.P.O. Fortune Ebie.

Also, in the course of the year, Alhaji Lawal Sani joined the Board in a non executive capacity and as an Independent Director. Please join me in welcoming him

Distinguished shareholders, permit me to re-state the obvious that our staff remain the most cherished valuable resource for our successful operation as a bank. This is why we will continue to place a very high regard on staff quality, welfare and training. It goes without saying therefore, that we have continued to attract and retain some of the best and brightest hands in the financial services sector in Nigeria and beyond. Also, we have created and sustained a highly motivating work environment and reward system that has ensured one of the lowest staff turnover rates in the industry.

Even in the face of emerging challenges, I can assure you that we will continue to sustain this enabling environment. This is because it does not only make for the development of management and staff talents and skills but also ensures self actualization and the accomplishment of corporate goals. On behalf of the Board of Directors and Shareholders, I therefore express our gratitude to the management and staff of the bank for their commitment and excellent performances.

Please, keep it up.

Distinguished shareholders, without sounding immodest, I can say that even in the face of a very challenging operating environment, Zenith Bank has maintained its culture of outstanding performance. As a bank, we are monitoring developments both in the local and global economy, and applying pragmatism and dynamism.

Obviously, we are not unmindful of the demands and obligations inherent in our environment: but this is why we have entrenched global best practices in every facet of our operations. We also ensure that all these are anchored on good corporate governance.