By Dipo Olowookere
One of the tier-1 lenders in Nigeria, Zenith Bank Plc, has expressed confidence to meet and surpass a profit of N1 trillion in the 2024 financial year.
The chief executive of the financial institution, Ms Adaora Umeoji, gave this assurance when the company engaged critical stakeholders in the Nigerian capital market ahead of its capital-raising exercise designed to meet the new minimum capital requirements of the Central Bank of Nigeria (CBN).
Zenith Bank, which has a presence outside the country, is expected like its peers to have at least N500 billion as a capital base.
The lender currently has N270.7 billion and will need to raise about N230 billion.
“We are planning to go to the market to raise capital, and as it stands, Zenith Bank has the least amount of capital to raise.
“We are looking to raise N230 billion because we are already at N270.7 billion. That is the least capital to raise among our peers.
“We believe that Zenith Bank has what it takes. We have the capacity, the network, the balance sheet, the human capital, and the track record to achieve that.
“We are planning for the future, and the technology we have now is the best in the entire industry. It will help us to have a seamless process and integrate,” Ms Umeoji said at the event.
Business Post reports that in the 2023 fiscal year, Zenith Bank posted shareholders’ funds of N2.3 trillion, a profit before tax of N796 billion, and a market capitalisation of N1.3 trillion, paying a dividend of N4 per share.
In the first quarter of 2024, the financial institution recorded a pre-tax profit of N320 billion, showing signs that it could hit the N1 trillion-mark by the end of the year.
According to Ms Umeoji, this would be achieved because of the quality of the board and management and a strong corporate culture in the bank and plans to drive financial inclusion, expand corporate and retail banking through technology and other state-of-the-art digital platforms, and the establishment of a fintech subsidiary, ZenPay, to drive profitability.
Last year, Zenith Bank achieved a remarkable triple-digit growth of 125 per cent in gross earnings at N2.123 trillion versus N945.6 billion in 2022, primarily driven by growth in interest and non-interest income.
Specifically, interest income jumped by 112 per cent to N1.1 trillion from N540 billion as a result of the growth in the size of risk assets and their effective repricing, alongside the increase in yield of other interest-bearing instruments over the year.
Also, the non-interest income grew by 141 per cent to N918 billion from N381 billion due to significant trading gains and an increase in gains from the revaluation of foreign currencies.
In the year, the cost of funds went up by 3.0 per cent from 1.9 per cent because of the high interest rate environment, with interest expense up by 135 per cent to N408.5 billion from N173.5 billion, though the cost-to-income ratio improved significantly to 36.1 per cent from 54.4 per cent due to improved top-line performance despite a 32 per cent hike in operating expenses in 2023.
Business Post reports that Zenith Bank ended the accounting year with a year-on-year 202 per cent rise in post-tax profit of N676.9 billion versus N223.9 billion in the preceding year.