Zenith Bank Plc has announced an impressive result for the year ended December 31, 2020, with Profit Before Tax (PBT) rising by five per cent to N255.9 billion from N243.3 billion in the corresponding period of 2019.
This is in spite of a challenging macro-economic environment exacerbated by the COVID 19 pandemic.
The increase arose from a combination of growth in the top-line and a significant reduction in interest expense to N121.1 billion in 2020 from N148.5 billion in 2019, as the net interest income increased toN299.7 billion in 2020 from N267.0 billion in 2019.
According to the bank’s audited financial results for the 2020 financial year presented to the Nigeria Stock Exchange (NSE) on Tuesday, the Group recorded a growth in gross earnings of five per cent to N696.5 billion from N662.3 billion in the previous year.
The Group recorded eight per cent growth in non-interest income to N251.7 billion in 2020 from N232.1 billion in 2019 and a one per cent increase in interest income to N420.8 billion in 2020 from N415.6 billion in 2019 The Group’s increased retail activities translated to a corresponding increase in retail deposits and loans.
Thus, retail deposits grew by N612.7 billion from N1.11 trillion to N1.72 trillion Year-on-Year (YoY), while savings balances significantly grew by 88 per cent Year on Year, YoY and closed at N1.16 trillion. This retail drive, coupled with the low-interest yield environment, helped reduce the cost of funding to 2.1 per cent from 3.0 per cent and also reduced interest expense. However, the low-interest environment also affected the net interest margin, which declined to 7.9 per cent from 8.2 per cent due to the re-pricing of interest-bearing assets.
Other performance indicators showed that operating costs grew by 10 per cent YoY but are still tracking well below inflation which at the end of the year stood at 15.75 per cent.
The Group also increased corporate customer deposits, which alongside the growth in retail deposits, delivered total deposit growth of 25 per cent , to close at N5.34 trillion, driving growth in market share.
Total assets also increased significantly by 34% to N8.48 trillion from N6.35 trillion.
Despite the COVID-19 pandemic and its associated challenges, the Group managed to create new viable risk assets as gross loans grew by 19 per cent , from N2.46 trillion to N2.92 trillion. This was achieved while maintaining a stable and low overall Non Performing Loan, NPL ratio of 4.29 per cent from 4.3 per cent in 2019 .
In demonstration of its commitment to its shareholders, the bank has announced a proposed final dividend payout of N2.70 per share, bringing the total dividend to N3.00 per share.
It should be noted that Zenith Bank was voted as Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and Best Corporate Governance ‘Financial Services’ Africa 2020 by the Ethical Boardroom.
Also, the bank emerged as the Most Valuable Banking Brand in Nigeria, for the fourth consecutive year, in the Banker Magazine “Top 500 Banking Brands 2021” and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking published by The Banker Magazine.