Zenith Bank Plc, Nigeria’s leading financial institution, recently held its Capital Markets Day to highlight the bank’s intrinsic values and strategic objectives as it embarks on its recapitalization journey.
The event, held in Lagos, brought together key market players to focus on the bank’s growth trajectory, market performance, and consistent, robust dividend payout over the years. It also provided a platform for Zenith Bank to inform capital market stakeholders about its robust risk management culture, adherence to regulations, capital adequacy, and maintenance of low non-performing loan levels.
During her address to stakeholders, investors, and analysts, Group Managing Director/Chief Executive Officer Dame Dr. Adaora Umeoji emphasized the bank’s strong financial position. She highlighted the Bank’s tier-1 capital of N1.8 trillion, shareholders’ funds of N2.3 trillion, market capitalization of N1.3 trillion, and a profit before tax of N796 billion. Additionally, she announced a dividend of N4 per share for the year ended December 2023. Providing guidance for 2024, Dr. Umeoji projected that the bank is on track to deliver over N1 trillion in profit before tax, given its robust performance, including a profit before tax of N320 billion in the first quarter of 2024.
Dr. Umeoji expressed confidence in the bank’s ability to deliver superior value to investors and other stakeholders, citing the quality of the board and management and a strong corporate culture. She also disclosed the bank’s future plans, which include driving financial inclusion, expanding corporate and retail banking through technology, and establishing a fintech subsidiary, ZenPay, to drive profitability. Furthermore, the bank plans to expand its operations to France and other Francophone African countries.
Explaining the bank’s recapitalization efforts, Dr. Umeoji stated, “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 among our peers. We are looking to raise N230 billion because we are already at N270.7 billion. We believe that Zenith Bank has 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.”
Chief Financial Officer/General Manager Dr. Mukhtar Adam highlighted the bank’s impressive financial growth over the past five years, noting a Compound Annual Growth Rate (CAGR) in revenue of over 27 per cent. Despite economic challenges, including a recession, Zenith Bank achieved a cumulative profit before tax growth of about 28 per cent. Dr. Adam praised the bank’s ability to deliver stable returns and consistent growth, even in a challenging market environment.
Zenith Bank’s achievements have been recognized globally, with the bank recently winning the Best Commercial Bank, Nigeria, in the World Finance Banking Awards 2024, retaining the award for the fourth consecutive year. The bank was also named Best Corporate Governance, Nigeria, for the third year running in the World Finance Corporate Governance Awards 2024. These accolades underscore the bank’s robust financial performance, superior customer service, sustainability initiatives, and corporate governance practices.
Commenting on the awards, Dr. Umeoji said, “These awards highlight our steadfast dedication to excellence, adherence to global best practices, and our persistent effort to deliver superior value to all stakeholders through innovative products and services. Receiving these awards consecutively for multiple years signifies the commitment of our staff, the loyalty of our customers, and the support of our shareholders. We remain devoted to setting industry benchmarks and driving excellence across all aspects of our operations.”
Dr. Umeoji also dedicated the awards to Founder and Chairman Dr. Jim Ovia, CFR, for his impactful leadership in establishing a robust and flourishing institution. She expressed gratitude to the board for their vision and insight, the staff for their unwavering dedication, and the bank’s customers for choosing Zenith as their preferred bank.
Zenith Bank’s audited results for the year ended December 31, 2023, reflect remarkable growth. Gross earnings increased by 125 per cent, from N945.6 billion in 2022 to N2.132 trillion in 2023. Profit before tax saw a year-on-year increase of 180 per cent, from N284.7 billion in 2022 to N796 billion in 2023, while profit after tax recorded a triple-digit growth of 202 per cent, from N223.9 billion to N676.9 billion.
The growth in gross earnings was driven by significant increases in both interest and non-interest income. Interest income rose by 112 per cent, from N540 billion in 2022 to N1.1 trillion in 2023, while non-interest income grew by 141 per cent, from N381 billion to N918.9 billion. The rise in interest income was attributed to 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. Growth in non-interest income was driven by significant trading gains and an increase in gains from the revaluation of foreign currencies.
Zenith Bank’s cost of funds also increased from 1.9 per cent in 2022 to three per cent in 2023 due to the high-interest rate environment. Despite this, the Group’s cost-to-income ratio improved significantly from 54.4 per cent in 2022 to 36.1 per cent in 2023, reflecting improved top-line performance. Return on Average Equity (ROAE) increased by 118 per cent, from 16.8 per cent in 2022 to 36.6 per cent in 2023, while Return on Average Assets (ROAA) grew by 95 per cent, from 2.1 per cent to 4.1 per cent.
Zenith Bank Plc, founded by Jim Ovia, CFR, in 1990, has grown to become one of Africa’s leading financial institutions. With more than 400 branches and business offices across Nigeria, the bank is headquartered in Lagos and remains committed to maintaining a customer-centric approach. Zenith Bank’s track record of excellent performance continues to earn it numerous awards, including being recognized as the Number One Bank in Nigeria by Tier-1 Capital for the 14th consecutive year in the 2023 Top 1000 World Banks Ranking by The Banker Magazine.
Zenith Bank has pioneered digital banking in Nigeria, achieving several firsts in deploying Information and Communication Technology (ICT) infrastructure to create innovative products that meet customers’ needs. The bank is a leader in deploying various banking technology channels, making the Zenith brand synonymous with state-of-the-art technologies in banking. Driven by a culture of excellence and strict adherence to global best practices, the bank combines vision, skillful banking expertise, and cutting-edge technology to create products and services that anticipate and meet customers’ expectations, enabling businesses to thrive and growing wealth for its customers.
Seunmanuel Faleye is a brand and communications strategist. He is a covert writer and an overt creative head. He publishes Apple’s Bite International Magazine.