By our reporter| Leading Tier 1 lender, Zenith Bank Plc has defied challenging macroeconomic environment aggravated by the COVID-19 pandemic to achieve a 10% rise in Profit Before Tax (PBT) for the year ended December 31, 2021.
The remarkable growth saw the pre-tax profit jumping to N280.4 billion from N255.9 billion reported in the previous year, according to the bank’s audited financial results for the 2021 financial year presented to the Nigeria Exchange Group (NGX).
The statement explained that the increase was due to growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12% from NGN121.1 billion in 2020 to NGN106.8 billion in the current year. This further led to a 7% increase in net interest income of NGN320.8 billion in 2021 from NGN299.7 billion in 2020.
The Group achieved year-on-year (YoY) growth in gross earnings of 10% from NGN696.5 billion reported in the previous year to N765.6billion. This was on the back of 23% YoY growth in non-interest income from N251.7billion to N309billion and a 2% YoY growth in interest income from N420.8billion to NGN427.6billion.
Also, customer deposits (from both corporate and retail customers) increased by 21%, growing from NGN5.34 trillion in the previous year to NGN6.47 trillion in the current year. Retail deposits grew by NGN146 billion from NGN1.72 trillion in 2020 to NGN1.87 trillion in 2021.
Deeper look into the statement revealed that the Group’s continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1% to 1.5% in the current year.
Although operating expenses grew by 13% YoY, the growth remains below the inflation rate, while the Group improved its Earnings per Share (EPS) which grew by 6% from NGN7.34 to NGN7.78.
Total assets increased by 11%, growing from NGN8.48 trillion in 2020 to NGN9.45 trillion in 2021, mainly driven by growth in customer deposits. With the steady recovery in economic activities, the Group prudently grew its gross loans by 20%, from NGN2.9 trillion in 2020 to NGN3.5 trillion in 2021, with moderated NPL ratio from 4.29% to 4.19% YoY.
The lender recorded impressive liquidity and capital adequacy ratios of 71.6% and 21.0%, which remained above regulatory thresholds of 30% and 15%, respectively.
The statement said, “In 2022, the Group intends to consolidate on the gains achieved in the previous year in all business segments and combine leadership in the industry, innovation, and technology to drive improved performance and deliver enhanced returns to all stakeholders.”
In line with its tradition of commitment to shareholders’ welfare, the bank has announced a proposed final dividend payout of N2.80 per share, bringing the total dividend to N3.10 per share.
The lender had earlier paid an interim dividend of N0.30 per share totaling N9.4 billion for the first half of the year. It paid shareholders N3.0 per share, summing up to N94.19 billion in 2020.
The impressive performances of the lender have not gone unnoticed both in national and international space. Zenith Bank was 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, among several other laurels.
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