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N208b feat: Zenith Bank is shining star of African banking industry, say shareholders

COMFORT EKELEME, Asst. Business Editor

Shareholders of Zenith Bank Plc have commended the impressive result for the year ended December 31, 2019 recently posted by the financial institution, describing the bank as the pride of every Nigerian shareholder.

Zenith Bank recently posted a Profit After Tax (PAT) of N208.8 billion, thus becoming the first Nigerian bank to cross the N200 billion mark.

Reacting, some financial experts said the feat is a clear indication of the bank’s resilience and market leadership in the country.

In an interview with Daily Champion, National Coordinator, Progressive Shareholders Association of Nigeria (PSAN) Mr. Boniface Okezie said that Zenith Bank in all parameters has demonstrated that it is the leader in the nation’s financial sector.

According to him, the feat shows clearly that Zenith Bank is one of the leading banks in Africa, adding that  it will remain so as long as the bank continues to deploy technology as the key driver in their business conduct.

He said: “The management led by the Group Managing Director, GMD/CEO, Mr. Ebenezer Onyeagwu and its board is doing very well in that direction. The bank will continue to deliver good results because the way the bank’s business has be conducted is in the best interest, best global practices so far not withstanding that the industry is over regulated both with the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) which has not been in the interest of the investing public not to talk of banking Industry

“You can only post such results if you really know what you are doing not because the regulators have done well in regulating,” he said.

Speaking further, Okezie noted that for businesses to survive in Nigeria, owners need to go extra mile. That is what the management of Zenith Bank has done by imbibing the culture of excellence in discharging its duty.

To him, the manner the Bank carry out its business to the banking public is second to none.

Okezie who maintained that no bank in Nigeria as of today will equal Zenith Bank in this achievement, stated that the proposed dividend to shareholders is the biggest in the industry till date

 He said: “Take a look at the bank’s loan portfolio and recovery; it is also on the high side which is very encouraging because banks have to help to grow the real sector of the economy. Zenith is always at the forefront in doing that to its customers, I have to commend them for the excellent good job so far.

Also speaking on the PAT, a shareholder activist, Alhaji Gbadebo Olatokunbo said the reason Zenith Bank is making significant impact in the nation is because strategic plans had been made long ago and mode of execution spelt out.

He said: “I am not really surprised at the financial results of the bank, every keen observer of the banking industry in Nigeria expects to see that. I have said it several times about the sustainability of the bank and more were yet to come in terms of good news because the plans had been laid long ago and mode of execution had also been marshaled while the managers were alive to their responsibilities. Zenith Bank is a pride of every Nigerian and the shining star of African banking industry,” he said.

According to the bank’s audited financial results for the 2019 financial year released recently on the floor of the Nigerian Stock Exchange (NSE), Profit After Tax (PAT) rose by 8 per cent to N208.8 billion from the N193 billion recorded in the previous year.

The Group also recorded a growth in gross earnings of 5 per cent rising to N662.3 billion from N630.3 billion reported in the previous year.

This growth was driven by the 29 per cent increase in non-interest income from N179.9 billion in 2018 to N231.1 billion in 2019.

Fees on electronic products continues to grow significantly with a 108per cent  Year on Year (YoY) growth from N20.4 billion in 2018 to N42.5 billion in the current year.  This is a validation of the bank’s retail transformation strategy which continues to deliver impressive results.

Profit Before Tax also increased by 5 per cent growing from N232 billion to N243 billion in the year under review, arising from top line growth and continued focus on cost optimization strategies. Cost-to-income ratio moderated from 49.3per cent to 48.8per cent.

The drive for cheaper retail deposits coupled with the low interest yield environment helped reduce the cost of funding from 3.1per cent to 3.0per cent.

However this also affected net interest margin which reduced from 8.9per cent to 8.2per cent in the current year due to re-pricing of interest bearing assets.

Although returns on equity and assets held steady YoY at 23.8per cent and 3.4per cent respectively, the Group still delivered improved Earnings per Share (EPS) which grew 8per cent from N6.15 to N6.65 in the current year.

The Group increased its share of the market as it secured increased customer deposits across the corporate and retail space as deposits grew by 15 per cent to close at N4.26 trillion.

Total assets also increased by 7per cent from N5.96 trillion to N6.35 trillion.  The Group created new viable risk assets as gross loans grew by 22per cent from N2.016 billion to N2.462 billion. This was executed prudently at a low cost of risk of 1.1per cent and a significant reduction in the non-performing loan ratio from 4.98per cent to 4.30per cent. Prudential ratios such as liquidity and capital adequacy ratios also remained above regulatory thresholds at 57.3per cent and 22.0per cent respectively.

In 2020, the Group remains strategically positioned to capture the opportunities in the corporate and retail segments, while efficiently managing costs and expanding further its retail franchise employing digital assets and innovation.

Consistent with this superlative performance and in recognition of its track record of excellent performance, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Most Valuable Banking Brand in Nigeria 2019 by The Banker.

The Bank GMD was also voted Champion Newspapers 2019 Bank CEO of the Year.

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