• Monday, May 20, 2024
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Zenith Bank: More wins as Onyeagwu prepares to exit

Zenith Bank: More wins as Onyeagwu prepares to exit

By Louis Achi

In about a week, the disciplined, focused, and incomparable choreography wrought in the high-octane financial services turf by Dr Ebenezer Onyeagwu, as the Managing Director and Chief Executive Officer of pace-setting Zenith Bank Plc, comes to an end.

Dr Onyeagwu’s ground-breaking five-year tenure, which saw Zenith Bank Plc transform into an innovative, sector-leading continental behemoth, concludes as Svelte Dame (Dr) Adaora Umeoji takes charge on June 1, 2024.

Significantly, Zenith Bank’s recent announcement of its compelling audited results for the year ended December 31, 2023, simply encapsulates the story of vision in action under the guidance of a sound professional and bold leader. The report revealed the bank achieved a remarkable triple-digit growth of 125 percent in gross earnings, from NGN 945.6 billion reported in 2022 to NGN2.132 trillion in 2023.

The captivating performance data simply spoke to the astute corporate governance stewardship of the outgoing Zenith Bank boss, Dr Onyeagwu. Some analysts perceive these top-notch 2023 records as a valedictory transformation that put the banking sector leader into an unparalleled orbit.

The audited results for the year ended December 31, 2023, revealed that the increase in gross earnings is primarily due to growth in interest and non-interest income. Interest income increased by 112 percent, from NGN 540 billion in 2022 to NGN 1.1 trillion in 2023. Non-interest income grew by 141 percent from NGN 381 billion to NGN 918.9 billion in the same period.

The increase in interest income is attributed to the growth in the size of the bank’s risk assets and their effective repricing, alongside the rise in the yield of other interest-bearing instruments over the year. Growth in non-interest income was driven by significant trading gains and an increase in gains from the revaluation of foreign currencies.

Specifically, the cost of funds grew from 1.9 percent in 2022 to 3.0 percent in 2023 due to the high interest rate environment, while interest expense increased by 135 percent from NGN 173.5 billion in 2022 to NGN 408.5 billion in 2023. Notwithstanding the 32 percent growth in operating expenses in 2023, the group’s cost-to-income ratio improved significantly from 54.4 percent in 2022 to 36.1 percent in 2023 due to improved top-line performance.

The return on average equity (ROAE) increased by 118 percent from 16.8 percent in 2022 to 36.6 percent in 2023, underpinned by improved gross earnings as the group sought to deliver better shareholder returns, while the return on average assets (ROAA) also grew by 95 percent from 2.1 percent to 4.1 percent in the same period.

The banking behemoth has continued to deepen its market leadership in key corporate and retail deposit segments as customer deposits increased by 69 percent from NGN 9.0 trillion to NGN 15.2 trillion in 2023. Its retail drive continues to yield dividends as retail deposits now constitute 46 percent of total deposits (compared to 44 percent in 2022) and grew by 77 percent from NGN 3.97 trillion in 2022 to NGN 7.04 trillion in 2023, also reinforcing increased customer confidence in the Zenith brand.

On the group’s assets front, its total assets increased by 66 percent from NGN 12.3 trillion in 2022 to NGN 20.4 trillion in 2023, largely due to growth in total deposits and the revaluation of foreign currency deposits. Gross loans grew by 71 percent from NGN 4.1 trillion in 2022 to NGN 7.1 trillion in 2023 due to the revaluation of foreign currency loans and the growth in local currency risk assets.

As a result of the focused, disciplined, and diligent approach to risk asset creation and management, the loan growth did not significantly impact the Non-Performing Loans (NPL) ratio, which increased marginally from 4.3 percent to 4.4 percent despite the heightened risk environment and challenging operating environment, an attestation to the group’s resilience despite headwinds and a challenging macroeconomic environment.

Also, the prudential ratios remain within regulatory thresholds, with the capital adequacy ratio (CAR) and liquidity ratio at 21.7 percent and 71.0 percent, respectively, at the close of 2023. As a demonstration of its commitment to shareholders, the bank has announced a proposed final dividend payout of NGN3.50 per share, bringing the total dividend to NGN 4.00 per share.

The group will complete the transition to a holding company structure in 2024, and this is anticipated to position it advantageously for exploring emerging opportunities in the fintech space while bolstering its digital and retail banking initiatives.

The Group is also undertaking urgent and necessary actions to meet the new minimum NGN 500 billion equity capital requirement to maintain its international authorization within the timeframe stipulated by the Central Bank of Nigeria (CBN). This will strengthen its presence in key markets to continue positioning for sustainable growth and value addition for stakeholders.

The bank’s track record of excellent performance has not gone unnoticed in an appreciative environment, and this has continued to earn the brand numerous awards, including being recognised as the Best Bank in Nigeria for the fourth time in five years, from 2020 to 2022 and in 2024, in the Global Finance World’s Best Banks Awards.

Zenith Bank also won the Best Bank for Digital Solutions in Nigeria in the Euromoney Awards 2023, being listed in the World Finance Top 100 Global Companies in 2023; being recognised as the Number One Bank in Nigeria by Tier-1 Capital for the 14th consecutive year in the 2023 Top 1000 World Banks Ranking published by The Banker Magazine; Best Commercial Bank, Nigeria, for three consecutive years from 2021 to 2023, in the World Finance Banking Awards; and Best Corporate Governance Bank, Nigeria, in the World Finance Corporate Governance Awards 2022 and 2023.

It also won Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and 2022; Best in Corporate Governance’ Financial Services’ Africa, for four successive years from 2020 to 2023, by the Ethical Boardroom; Most Sustainable Bank, Nigeria, in the International Banker 2023 Banking Awards; Best Commercial Bank, Nigeria; and Best Innovation in Retail Banking, Nigeria, in the International Banker 2022 Banking Awards.

More recently, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Bank of the Year 2023, and Retail Bank of the Year for three consecutive years from 2020 to 2022, at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards. Similarly, Zenith Bank was named Bank of the Decade (People’s Choice) at the ThISDay Awards 2020, Bank of the Year 2021 by Champion Newspaper, Bank of the Year 2022 by New Telegraph Newspaper, and Most Responsible Organisation in Africa 2021 by SERAS Awards.

For critical context, it’s important to note that Dr Onyeagwu’s appointment as the GMD/CEO of Zenith Bank Plc. on June 1, 2019, through his tenure that ends on June 1, 2024, coincided with significant global disruptions that vanquished traditional business playbooks.

The unprecedented economic conditions wrought by the global pandemic, seismic shifts on the global scene mirrored by European and North America’s new nationalism, Sino-America tensions, the ongoing Russo-Ukranian conflict, and the more recent Middle East tensions, which continue to impact diverse planetary business eco-systems, framed a very challenging environment to drive a unique sector like banking.

However, through these enervating storms, the Zenith Bank-led Onyeagwu remained a focused turf player and a powerful financial services sector entity that has indeed earned its glittering stripes. Onyeagwu clearly brought to his job astute strategic thinking, inspirational leadership, energy, and consummate entrepreneurial skills.

His unique traits are anchored on fetching humility, notable consistency, stern discipline, deep ethics, unrelenting hard work, and outstanding professionalism. Dr Onyeagwu is indeed an inspirational leader with impeccable track records of excellence.

On the eve of his exit, it is worth noting that indeed he is a leader with all the attributes that corporate Nigeria needs at a time like this—surely taking Zenith Bank to the zenith. All the performance indicators tell the story of an achiever like no other.

Bristling with about 35 years of industry experience, Onyeagwu has led Africa’s top-flight financial institution on a positive trajectory. This has seen Zenith Bank surpass its peers in all sector metrics.

On a valedictory note, it is a given that no organisation can live without its dreamers and achievers. “The future belongs to those who believe in the beauty of their dreams,” former US First Lady Eleanor Roosevelt aptly noted. No less a sublime dreamer and great achiever, Dr Ebenezer Onyeagwu, must have logged into this philosophy to power his compelling professional trajectory.

For Zenith Bank Plc and Dr Onyeagwu, the corporate triumphs remain double wins.

Louis Achi is a Senior Journalist at The AUTHORITY Newspapers, Abuja