Sustenance of macro-economic stability that has been the core objective of economic policies in the past few years remained so during the fifteen months period under review. This translated to fiscal and monetary policies of government focusing on ensuring that the rate of inflation remained low and at single digit while the exchange rate remains stable and the interest rates low and declining. However, mixed results were achieved in these regards. While the exchange rate improved markedly, the inflation targets were not attained. Thus, the average exchange rate of the Naira against the US dollar which stood at N 127.00 to US$ l at end-June 2007, appreciated to Nl16.00 to US$ l as at end-December 2007, but came to Nl17.65 to USS1at end-September 2008. On the other hand, inflation rate (year-on-year) which was at 6.40 per cent at end -June 2007, rose slightly to 6.60 per cent at end -December 2007; it jumped to 12.0 per cent in June 2008, and climbed further to 13.0 per cent at end -September 2008. This inflation rates trend was attributable to increased capital injections by the various tiers of government, increases in the prices of some staple food items and building materials, diesel and gas, among others.

The economy as measured by Gross Domestic Product (GDP) recorded a steady growth during the period under review. Thus, according to the Central Bank of Nigeria (CBN) figures, the GDP measured in 1990 basic prices, grew by 6.22 per cent in 2007, and stood at an estimated 6.45 per cent at end-September 2008. This growth trend was due to a number of factors, including favourable revenue inflow arising in part from high crude oil prices in the international market. Other contributory factors include stability in the prices and supply of petroleum products, improved foreign direct and portfolio investment inflow, stable foreign exchange market, among others. From a level of US$64 per barrel in June 2007, the average crude price stood at US$ l00 per barrel at end-December 2007; rose further to US$135 per barrel by June 2008, but dropped to US$97 per barrel at end-September 2008. These prices were as against US$40 per barrel and US$ 59 per barrel that were the benchmarks for 2007 and 2008 budgets respectively. This oil price trend translated into handsome foreign exchange earnings and sustained improvement in foreign exchange reserves as well as a boost to the 'excess crude account'. Thus, the external reserves which stood at US$52 billion in December 2007 rose to US$59.20 billion in June 2008, closing the fifteen months period under review at US$63 billion.

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Nigeria, also during the period under review, received improved sovereign and currency ratings by Fitch Ratings and Standard and Poor's (S & P). Thus, while Fitch awarded Nigeria BB- (same as in the past two years), it upgraded her local currency rating from BB- to BB, noting that the "economy is stable and government's fiscal management also improving". S & P also awarded BB- to Nigeria, explaining that this was on account of greater fiscal flexibility "due to a much reduced debt burden and high oil prices".

In the banking sector, the Central Bank of Nigeria applied a number of regulatory initiatives to sustain the gains of consolidation and soundness of the macro -economy. 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 raised the MPR from 8.0 per cent in June 2007 to 9.50 by end-December 2007; and further to 10.50 per cent in June 2008, but dropped it to 9.75 per cent by end-September 2008. It similarly altered the cash reserve ratio (CRR) and the liquidity ratio, among others- "to lubricate the system". These measures generally moderated interest rates movement during the period under review. Average prime lending rate which stood at 17.63 per cent in June 2007, inched up to 17.70 per cent in September same year, but closed the twelve months ending September 2008 at 1 7.49 per cent. Similarly, average interest rate on savings account which was at 3.45 per cent in June 2007 remained almost flat at 3.52 per cent as at end-September 2008. All these reflected in increased deposit money banks' (DMB) lending, both to the economy and particularly to the private sector.

The apex bank during the fifteen months also introduced or announced some policies which it either cancelled or postponed. These include the Naira re denomination under which "all Naira assets, prices and contracts" would have been re-denominated by dropping two zeroes or two decimal points to the left with effect from August 2008. There was also a proposal/cancellation of a common accounting year end for the DMBs, owing to "observed desperate behaviour of some banks in deposit mobilization and hiking of interest rates to levels that cannot be justified by the fundamentals". All this influenced the activities of all economic agents including the banks during the period under review.

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In the capital market, there was a mix of the reign of 'the bear and the bull'-with the first nine months of the period under review recording heightened activity and the last six months experiencing a lull. The net effect of this was a downward trend in all indices of the market. The Nigerian Stock Exchange (NSE) All-share Index (AS!) which closed 2007 at 57,990.22 points, had by September ending 2008 declined, to 46, 216.1 3 points; while the Market Capitalization that hit N 10.12 Trillion at end-December 2007, ended the same period at N9.84 Trillion. These outcomes which reflected in the depreciation in the value of the shares of quoted companies were attributable to a number of factors, including the global financial meltdown that erupted in most advanced economies by September' 2008. The government and the regulatory agencies have put a number of measures in place to arrest this trend, and we are very optimistic about a turnaround soon.

It is noteworthy that even with the bearish trend in the market, your bank, Zenith Bank Plc, still ranked among the top performers in the market by all indices. With a market capitalization of N613.70 billion as at end-September 2008, Zenith Bank was the quoted company with the second highest value in the entire market. Its streak of sterling performances, more than in the previous years, earned it a number of accolades, recognitions and prestigious awards, locally and internationally in the fifteen months under review. Some of these awards include: 'Best Bank in Nigeria 2008' by The Euromoney Magazine; '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 so many others.

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It is gratifying to note that even in the face of the heightening competition in the financial services sector, your bank and its subsidiaries have continued to surpass performance projections. Thus, the financial results of the Group for the fifteen months ended September 30, 2008, show significant appreciation in all parameters. These results are, once again, an eloquent testimony to the continued sound financial health of the Group. For the bank, profit before tax was N48.94 billion, representing a 110 per cent increase over last year's figure of N23.29 billion.

Gross earnings increased by 113 per cent over the figure of N89.19 billion for last year to hit N190.08 billion during the period under review. Total assets plus contingents similarly increased by 102 per cent or N1.20 trillion to stand at N2.38 trillion during the period. Total deposits grew 104 per cent to N1.16 trillion; while shareholders' funds rose by 200 per cent to hit N338.48 billion.

As a Group, the performance indices also recorded significant improvements. Thus, the Group gross earnings which stood at N94.88 billion at June 30, 2007 rose by 120 per cent to hit N208.29 billion at September 30, 2008. Group profit before tax grew by 119 percent, from N25.67 billion to N56.12 billion during the period. Profit after tax for the Group also rose substantially, by 177 per cent, from N18.78 billion to N51.99 billion. Group total deposit rose by 87 percent, from N634.49 billion to N1.18 trillion; while the Shareholders' fund grew by 198 per cent, from N116.45 billion to N346.61 billion. Group asset plus contingents which stood at N1.27 trillion in 2007, rose by 98 per cent, closing the financial year ended September 30, 2008 at N2.51 trillion.

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Our commitment to delivering superior returns to shareholders remains unwavering; and this, we once again demonstrate by ensuring that a reasonable chunk of our profit is in the hands of our valued investors.

The Board is therefore pleased to recommend a dividend of N28.446 billion; that is, 170 kobo per 50 kobo share. This is a 207 per cent rise in total dividend and 70 per cent growth in dividend per share over the 2007 levels.

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We have no reason to relent in our expansion drive; rather, we have continued with increased zeal during the fifteen months under review, leading to more subsidiaries and further spreading of our branches and franchise across the country and beyond. Our branch network now goes beyond state capitals, the FCT Abuja and major towns and cities in the country.

We have endeavoured to reach most of the local government headquarters in the land. In fact, in addition to the already existing Zenith Bank (UK) Limited in London and Zenith Bank (Ghana) Limited, we opened another wholly-owned subsidiary in Freetown, Sierra Leone during the period under review. Our representative office in Johannesburg, South Africa is up and running. I can assure you that this growth and expansion effort will be sustained in the foreseeable future in our determination to continue to play as a reputable global financial institution.

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May I, at this juncture, express our inestimable gratitude and indebtedness to our teeming valued customers for their continued patronage and unwavering loyalty to the Zenith brand. In point of fact, your invaluable contribution and consistent support remains the key driver of the sterling results that we turn in year-in year-out as a bank. Given our antecedents of excellent results delivery, I can assure you that more than ever before, we will continue to render to you unparalleled premium service. In pursuit of this, we have further upgraded and refitted our ICT infrastructure to deliver our bouquet of service offerings in a manner that beats customer expectations.

We have also further streamlined arrangements for more meaningful engagements with all our stakeholders, especially our customers. Let me assure you that as a responsive and customer-focused bank, we will continue to evolve methods and strategies to consistently deliver financial solutions that elicit your enthusiasm and surpass your expectations.

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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 Prof. L. F. 0 Obika, Alhaji Baba Tela, Mr. Andy Ojei and Mr. Udom Emmanuel.

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Esteemed shareholders, permit me to state that our staff remain the most critical resource for our successful operations as a bank. This is why we have continued to place a very high premium on staff quality and welfare. In this regard, we have continued to attract and retain some of the brightest professionals in the banking industry in Nigeria and beyond. In tandem, we have also created and sustained a highly motivating work environment and reward system that has ensured one of the lowest staff turnover rates in the industry.

I can assure you that we will continue to sustain this enabling environment that makes for the development of management and staff talents and skills; ensures self actualization and the attainment of corporate objectives. On behalf of the Board of Directors and Shareholders, I express our gratitude to the management and staff of the bank for their commitment and sterling performances. Please, remain steadfast.

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Dear shareholders, with every sense of pride and satisfaction, I can say that Zenith Bank has maintained its culture of excellent performance up to and including the period under review. And every indicator shows it is poised to do even better in the future. As a bank, we are monitoring developments both in the local and global economy, and have proactively put in place mechanisms to ensure we keep excelling. It is yet a fact that the fundamentals of the Nigerian economy remain sound and portend even better days ahead.

Let me also assure you that as a bank, we will continue to reinvent ourselves and our systems to effectively tackle the unfolding challenges and exploit emerging opportunities. With our spread into some key financial centres of the world, we are determined to remain a global player and to keep discharging the responsibilities arising therein. Obviously, we are not unmindful of the demands and obligations that go with this; which is why we have entrenched global best practices in every facet of our operations. We also ensure that all these are driven by the tenets of good corporate governance.

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