Despite the persistent challenging macroeconomic conditions and headwinds, Zenith Bank PLC has achieved an impressive double-digit growth of 24 percent in gross earnings from NGN765.6 billion reported in the previous year [2021] to NGN945.5 billion in 2022.

This growth, according to the Zenith Bank Group was driven by 26 percent year-on-year (YoY) growth in interest income from NGN427.6 billion to N540.2 billion and 23 percent year-on-year (YoY) growth in non-interest income from NGN309 billion to NGN381 billion.

In its audited financial results for the 2022 financial year presented to the Nigerian Exchange (NGX), the Group’s profit before tax witnessed a growth of 2 percent from NGN280.4 billion to NGN284.7 billion in the current year. The increase in profit before tax was due to the significant growth in all the income lines.

In terms of impairment growth, Zenith Bank Plc grew by 106 percent from NGN59.9 billion to NGN123.4 billion, while interest expense grew by 63 percent YoY from NGN106.8 billion to NGN173.5 billion, respectively.

The impairment growth, which also resulted in an increase in the cost of risk (from 1.9% in 2021 to 3.2% in the current year), included the impact of Ghana’s sovereign debt restructuring programme.

This, however, did not heavily impact on the operations of the Ghana Subsidiary as Zenith Bank Ghana still maintains a substantial capital and liquidity buffer to continue to operate at its optimum best.

The growth in interest expense further increased cost of funds which grew from 1.5 percent in 2021 to 1.9 percent in 2022 due to interest rate hikes across the world.

Commenting on the bank’s financial performance during an earnings call with stakeholders, the Group Managing Director/Chief Executive Officer (CEO) of Zenith Bank, Ebenezer Onyeagwu stated: “We are pleased with the bank’s performance in 2022, which reflects our resilience and ability to adapt to the evolving business landscape. Despite the challenges posed by the macroeconomic environment, we were able to achieve significant growth in our gross earnings driven by increases in both interest income and non-interest income,” he added.

Impressive customer deposits

In the audited financial results for the 2022 financial year, customer deposits of Zenith Bank Plc surged by 39 percent, growing from NGN6.47 trillion in the previous year to NGN8.98 trillion in 2022.

The growth in customer deposits however cuts across all products and deposit segments (corporate and retail), consolidating the banks’ sterling market leadership and confidence imposed by its customers.

The continued elevated yield environment positively impacted on the net-interest-margin (NIM), which grew from 6.7 percent to 7.3 percent due to an effective repricing of interest- bearing assets.

Operating costs

The operating expenses of Zenith Bank Plc ending December 2022 grew by 17 percent YoY, while cost growth was controlled and remains below the inflation rate.

The Group’s profit after tax (PAT) also decreased by 8 percent from NGN244.6 billion to NGN223.9 billion due to an increase in effective tax rate from 12.7 percent in 2021 to 21.3 percent in 2022. This increase was due to effective implementation of the Finance Act.

In the same context, the significant increase is a one-off and is not expected to recur in subsequent years. In addition, the affected return on equity reduced from 20.4 percent to 16.8 percent while return on assets decreased from 2.7 percent to 2.1 percent due to the significant growth in the balance sheet.

Bank’s increased assets

Meanwhile, total assets of Zenith Bank Plc increased by 30 percent, growing from NGN9.45 trillion in 2021 to NGN12.29 trillion in 2022 mainly as a result of the rapid growth in customer deposits.

With the steady and continued recovery in economic activities, the Group prudently grew its gross loans by 18 percent, from NGN3.5 trillion in 2021 to NGN4.1 trillion in 2022, leading to a marginal increase in the non-performing loan (NPL) ratio from 4.2 percent to 4.3 percent YoY.

The capital adequacy ratio of the bank also decreased from 21 percent to 19.8 percent while the liquidity ratio improved from 71.6 percent to 75 percent. Both prudential ratios remain well above regulatory thresholds.

In the 2023 financial year, the Group intends to expand its frontiers as it also reorganises into a holding company structure adding new verticals to its businesses and growing in all its 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.

In recognition of its track record of excellent performances, Zenith Bank was recognized as the Number One Bank in Nigeria by Tier-1 Capital for the 13th consecutive year, in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine.