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Zenith Bank pays N94.19bn as dividend to shareholders

Shareholders of Zenith Bank Plc, on Tuesday unanimously approved the proposed final dividend of N2.70 per share, bringing the total dividend payment for the 2020 financial year to N3.00 per share with a total value of N94.19 billion.

The shareholders made the approval at the 30th annual general meeting of the bank held in Lagos. This followed the recent release of the bank’s audited financial results for the 2020 financial year.

According to the audited financial results, profit before tax (PBT) rose by 5 percent to N255.9 billion from N243.3 billion reported in the previous year despite a challenging macro-economic environment exacerbated by the COVID 19 pandemic.

The increase arose from a mixture of growth in the top line and a significant reduction in interest expense from N148.5 billion in 2019 to N121.1 billion in 2020, significantly increasing the net interest income from N267.0 billion in 2019 to N299.7 billion in 2020.

The Group recorded a growth in gross earnings of 5 percent from N662.3 billion in the previous year to N696.5 billion. The Group recorded 8 percent growth in non-interest income from N232.1 billion in 2019 to N251.7 billion in 2020 and a 1 percent increase in interest income from N415.6 billion in 2019 to N420.8 billion in 2020.

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The Group’s increased retail activities translated to a corresponding increase in retail deposits and loans. Thus, retail deposits grew by NGN612.7 billion from N1.11 trillion to N1.72 trillion year-on-year (YOY), while savings balances significantly grew by 88% YOY and closed at N1.16 trillion. This retail drive, coupled with the low-interest yield environment, helped reduce the cost of funding from 3.0 percent to 2.1 percent and reduced interest expense

However, the low-interest environment also affected the net interest margin, which declined from 8.2 percent to 7.9 percent in the current year due to the repricing of interest-bearing assets. Operating costs grew by 10 percent YOY but are still tracking well below inflation which at the end of the year stood at 15.75 percent.

Although returns on equity and assets also reduced from 23.8 percent to 22.4 percent and from 3.4 percent to 3.1 percent, respectively, the Group still delivered improved Earnings per Share (EPS), which grew 10 percent from N6.65 to N7.34 in the current year.

The Group equally increased corporate customer deposits, which alongside the growth in retail deposits, delivered total deposit growth of 25 percent, to close at N5.34 trillion, driving growth in market share. Total assets also increased significantly by 34 percent, from N6.35 trillion to N8.48 trillion.

Despite the COVID- 19 pandemic and its associated challenges, the Group managed to create new viable risk assets as gross loans grew by 19 percent, from N2.46 trillion to N2.92 trillion. This was achieved while maintaining a stable and low overall NPL ratio of 4.29 percent (2019: 4.3 percent) across the entire portfolio and an increase in the cost of risk from 1.1 percent to 1.5 percent, reflecting the elevated risk environment in 2020. The Group recorded impressive liquidity and capital adequacy ratios of 66.2 percent and 23.0 percent and remained above regulatory thresholds of 30 percent and 15 percent, respectively.

In recognition of its track record of excellent performance, Zenith Bank was voted as Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and Best Corporate Governance ‘Financial Services’ Africa 2020 by the Ethical Boardroom.

Also, the bank emerged as the Most Valuable Banking Brand in Nigeria, for the fourth consecutive year, in the Banker Magazine “Top 500 Banking Brands 2021” and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking published by The Banker Magazine.

Similarly, the bank was recognised as Bank of the Decade (People’s Choice) at the Thisday Awards 2020, Retail Bank of the year at the 2020 Businessday Banks and Other Financial Institutions (BAFI) Awards, and Best Company in Promotion of Good Health and Well-being as well as Best Company in Promotion of Gender Equality and Women Empowerment at the Sustainability, Enterprise and Responsibility (SERAS) Awards 2020.

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