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Zenith Bank grows gross earnings by 24% to N945.5b in 2022

Zenith Bank’s quarterly profit jumps 149% to N434.2bn

Zenith Bank Plc has announced its audited results for the year ending December 31, 2022, achieving a double-digit growth of 24 percent in gross earnings from N765.6 billion reported in the previous year to N945.5 billion in 2022. This is despite the persistently challenging macroeconomic environment and headwinds, the bank said.

According to the audited financial results for the 2022 financial year presented to the Nigerian Exchange (NGX), the double-digit growth in gross earnings was driven by a 26 percent year-on-year (YoY) growth in interest income from N427.6 billion to N540.2 billion and a 23 percent year-on-year (YoY) growth in non-interest income from N309 billion to N381 billion.

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Profit before tax also grew by 2 percent, from N280.4 billion to N284.7 billion, in the current year. The increase in profit before tax was due to the significant growth in all the income lines.

Impairments grew by 107 percent from N59.9 billion to N124.2 billion, while interest expense grew by 63 percent year over year from N106.8 billion to N173.5 billion, respectively. The impairment growth, which also resulted in an increase in the cost of risk (from 1.9 percent in 2021 to 3.3 percent in the current year), was due to the impact of Ghana’s sovereign debt restructuring programme.

The growth in interest expense increased the cost of funds from 1.5 percent in 2021 to 1.9 percent in 2022 due to hikes in interest rates globally.
Customer deposits increased by 39 percent, growing from N6.47 trillion in the previous year to N8.98 trillion in the current year. The growth in customer deposits came from all product and deposit segments (corporate and retail), thus consolidating the bank’s market leadership and indicating customers’ trust.

The continued elevated yield environment positively impacted the bank’s net interest margin, which grew from 6.7 percent to 7.2 percent due to an effective repricing of interest-bearing assets. Operating expenses grew by 17 percent year over year, but growth remains below the inflation rate.

Total assets increased by 30 percent, growing from N9.45 trillion in 2021 to N12.29 trillion, mainly driven by growth in customer deposits. With the steady and continued recovery in economic activities, the Group prudently grew its gross loans by 20 percent, from N3.5 trillion in 2021 to N4.1 trillion in 2022, which increased the non-performing loan (NPL) ratio modestly from 4.2 percent to 4.3 percent YoY.

The capital adequacy ratio decreased from 21 percent to 19 percent, while the liquidity ratio improved from 71.2 percent to 75 percent. Both prudential ratios are well above regulatory thresholds.

In furtherance of its holding structure objective this year, the Group intends to expand its frontiers by adding new verticals to its businesses and growing in all of its chosen markets, both locally and internationally.

As a testament to its commitment to shareholders, the bank has announced a proposed final dividend payout of N2.90 per share, bringing the total dividend to N3.20 per share.