How Zenith bank is driving financial system resilience, soundness

Nigeria’s financial system remains resilient and continues to provide significant support for the domestic recovery, according to Aisha Ahmad, deputy governor of the Central Bank of Nigeria (CBN) in charge of financial services stability.

Data provided by the CBN staff showed stability in broad financial soundness indicators and sustained improvement in asset quality, alongside growing credit to the private sector.

Consequently, Capital Adequacy Ratio (CAR) as at February 2022 was robust at 14.40 per cent. Industry liquidity was also strong at 43.5 per cent over the same period while the non-performing loans ratio declined further to 4.8 per cent in February 2022, from 4.94 per cent in December 2021. This reflects the case-by-case review of regulatory forbearance, effects of the Global Standing Instruction (GSI) policy, and sound industry risk management practices.

Zenith Bank alone is a proof of Nigeria’s financial institutions’ soundness as the bank ended its March 31, 2022 financial year in strong growth.

However, going into the remainder of 2022, the Group said it would continue to focus on sustainable growth across all its business segments and deploy technology platforms and digital assets intuitively to serve its various customers’ needs to deliver enhanced returns to its stakeholders.

Zenith Bank Plc was incorporated in Nigeria under the Companies and Allied Matters Act as a private limited liability company on May 30, 1990. It was granted a banking licence in June 1990, to carry on the business of commercial banking and commenced business on June 16, 1990. The Bank was converted into a Public Limited Liability Company on May 20, 2004. The Bank’s shares were listed on October 21, 2004 on the Nigerian Stock Exchange, and in August 2015, the Bank was admitted into the Premium Board of the Nigerian Stock Exchange.

The principal activity of the Bank is the provision of banking and other financial services to corporate and individual customers. Such services include granting of loans and advances, corporate finance and money market activities.

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The Bank has six subsidiary companies namely, Zenith Bank (Ghana) Limited, Zenith Pensions Custodian Limited, Zenith Bank (UK) Limited, Zenith Bank (Sierra Leone) Limited, Zenith Bank (Gambia) Limited and Zenith Nominees Limited. The results of the bank’s subsidiaries have been consolidated in its three months period financial statements.

In its unaudited results for the first quarter (Q1) 2022, the bank recorded 22 percent growth in gross earnings, from N157.3 billion reported in Q1 2021 to N191.5 billion in Q1 2022.

The Group recorded an 11 per cent year-on-year (YoY) increase in profit before tax to N67.99 billion in Q1 2022, from N61.02 billion in Q1 2021.

In terms of profitability, its profit after tax also grew by 10 per cent, from N53.06 billion in Q1 2021 to N58.19 billion in Q1 2022. The growth in the top line arose from both interest income and non-interest income.

The Group’s interest income rose by 25 per cent, to N126.38 billion in Q1 2022, from N101.12 billion in Q1 2021 while non-interest income grew by 12 per cent, from N51.20 billion in Q1, 2021 to N57.23 billion Q1, 2022.

The growth in interest income and non-interest income followed the combined effects of an improvement in interest income on loans and advances (as risk assets continue to grow and pricing is gradually improving) and an improvement in non-interest income as the bank continued to deploy its retail strategy, thereby acquiring more customers and expanding its electronic banking income from the increased volume of transactions across all its channels.

Also, the Group’s total assets grew by 9 per cent, from N9.45 trillion to N10.32 trillion in 2022, largely driven by growth in customers’ deposits. Customer deposits grew by 12 per cent, from N6.47 trillion in December 2021, to N7.25 trillion in March 2022. Savings account balance, which is solely retail, grew by over N68 billion and was a validation of the robust customer acquisition strategy and versatile electronic platforms and digital channels.

On loans and advances the Group recorded 6 per cent growth, from N3.5 trillion in December 2021, to N3.7 trillion in March 2022, boosting the Group’s interest income and displaying the Group’s appetite for high-yielding risk assets creation.

The development also helped to boost the net interest margin (NIM), as it improved from 6 per cent in March 2021, to 7.3 per cent in the current period, while the capital adequacy ratio improved slightly from 21.1 per cent to 22.1 per cent.

The resilience and soundness of the bank is a true demonstration of the strategic leadership of Ebenezer Onyeagwu, managing director/CEO, a seasoned banker and an astute financial strategist with over three decades of banking experience.

Zenith bank has for a third consecutive year, won the Best Bank in Nigeria in the Global Finance Magazine’s Best Banks Awards 2022, coming among other banks from 36 countries.

The editors of Global Finance made the selections after extensive consultations with corporate financial executives, bankers and banking consultants, and analysts worldwide.

Global Finance considered factors that ranged from the quantitative objective to the informed subjective in selecting the top banks.

Objective criteria considered included: growth in assets, profitability, geographic reach, strategic relationships, new business development and innovation in products. Subjective criteria included the opinions of equity analysts, credit rating analysts, banking consultants and others involved in the industry.

“This award is a testament to our tenacity despite a very challenging macroeconomic environment. Indeed, being recognised, for the third consecutive year, is an acknowledgement of the resilience of the Zenith brand as the leading financial institution in Nigeria,” Onyeagwu was quoted to have said while commenting on the award.

He appreciated contributions and efforts of the bank’s key stakeholders – the founder and Chairman, Jim Ovia, for his pioneering role in building the structures and laying the foundation for an enduring and successful institution, the Board for the outstanding leadership they provide, the staff for their commitment and dedication as well as the Bank’s customers for their unwavering loyalty and support.

Founded in 1987, Global Finance regularly selects the top performers among banks and other financial services providers, and the awards have become a trusted standard of excellence for the global financial community.

The bank’s track record of excellent performance has earned the brand numerous awards, including being voted as Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, and Best in Corporate Governance ‘Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine and the Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.

Zenith Bank was also honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.