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Why Zenith Bank’s Shares Remain Toast of Investors—Sunny Nwosu

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Zenith Bank's Shares

By Dipo Olowookere

The Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, has commended the board and management of Zenith Bank Plc for the payment of dividends to shareholders.

Speaking at the 31st Annual General Meeting (AGM) of the bank held on Wednesday, April 6, 2022, at the Civic Centre, Victoria Island, Lagos, he said investors love to have Zenith Bank’s shares in their portfolios because it never fails to pay dividends to shareholders.

He praised the financial institution for being consistent in the payment of dividends to shareholders, just as it did yesterday by crediting their accounts with N97.33 billion.

At the meeting on Wednesday, the final dividend payment of N2.80 per share proposed by the board was unanimously approved, bringing the total cash reward for the 2021 financial year to N3.10 per share.

Another shareholder of the company at the gathering, Mr Faruk Umar, who is the President of the Association of the Rights of Nigerian Shareholders (AARNS), also applauded the bank for rewarding loyalty.

“The bank is doing very well. All the ratios and indices have gone up. And more importantly, while we were in the meeting, I got my alert of the credit of my dividend. This is very commendable.

“The leadership of the bank has been very effective; we thank Jim Ovia for the leadership he has been giving, he has increased the dividend in spite of the economic hardship in the country, and I believe the GMD is doing very well.

“I commend the management and staff of the bank, including the board, and I am very confident that this year would also be very good for the bank,” he said.

Business Post reports that in spite of a challenging macroeconomic environment aggravated by the COVID-19 pandemic, Zenith Bank grew its gross earnings year-on-year by 10 per cent from N696.5 billion in 2020 to N765.6 billion in 2021.

This was buoyed by a 23 per cent growth in non-interest income from N251.7 billion to N309 billion and a 2 per cent rise in interest income from N420.8 billion to N427.6 billion.

In the year, profit before tax also grew by 10 per cent from N255.9 billion to N280.4 billion as a result of the growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12 per cent from N121.1 billion in 2020 to N106.8 billion in the current year. This further led to a 7 per cent increase in net interest income of N320.8 billion in 2021 from N299.7 billion in 2020.

It was observed that last year, the lender increased its customer deposits by 21 per cent to N6.47 trillion from N5.34 trillion, with the growth from both corporate and retail customers.

A breakdown showed that retail deposits grew by N146 billion from N1.72 trillion in 2020 to N1.87 trillion in 2021 on the back of a continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1 per cent to 1.5 per cent in the current year.

Although operating expenses grew by 13 per cent, growth remains below the inflation rate, and the Group improved its Earnings per Share (EPS) by 6 per cent from N7.34 to N7.78.

Also, Zenith Bank expanded its total assets by 11 per cent from N8.48 trillion in 2020 to N9.45 trillion in 2021, mainly driven by growth in customer deposits.

With the steady recovery in economic activities, the Group prudently grew its gross loans by 20 per cent from N2.9 trillion to N3.5 trillion, with a non-performing loan (NPL) ratio at 4.19 per cent compared with 4.29 per cent a year earlier.

Zenith Bank also recorded impressive liquidity and capital adequacy ratios of 71.6 per cent and 21.0 per cent, which remained above regulatory thresholds of 30 per cent and 15 per cent, respectively.

While commenting on the performance of the bank at the AGM, the Group Managing Director/Chief Executive, Mr Ebenezer Onyeagwu, said: “If you look at the bank’s history over the years, Zenith Bank has always grown, and even within the pandemic, we have maintained a reasonable positive growth trajectory.

“Growth is coming from the fact that we are deploying our digital capability to grow more businesses, simplify our service processes, make our processes more efficient, and deal with customers’ complaints.

“Apart from developing new products, we are discovering new business verticals, especially within the retail segment, which have significant revenue.”

He added that: “meeting the expectation of shareholders means we have to work harder. The team is dodged, hardworking, resilient, and above all, we have a very supportive board that comes with superior guidance.”

On his part, the founder and Chairman of Zenith Bank, Mr Jim Ovia, thanked the shareholders for their unflinching loyalty, which has enabled the bank to rise to the pinnacle of the nation’s financial services industry, and assured them of the bank’s commitment to consistently deliver superior value to them.

In recognition of its track record of excellent performance, Zenith Bank was voted as Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, and Best in Corporate Governance ‘Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom.

Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine and the Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.

Similarly, Zenith Bank was honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.

Sir Sunny nwosu

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Banking

Ecobank Clinches ‘Excellence in Fintech-Banking Relationships’ Award

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Ecobank Business Account

By Modupe Gbadeyanka

Another feather has been added to the well-decorated cap of Ecobank Group as it recently clinched the Excellence in Fintech-Banking Relationships award at the Africa Fintech Summit.

The lender received this accolade in Washington DC, United States of America (USA) in recognition of its activities to support and facilitate fintech growth on the African continent.

The Group Executive, Operations & Technology, Ecobank, Mr Tomisin Fashina, who received the award on behalf of the bank, attributed the recognition to the pan-African bank’s unparalleled influence in Africa and its unwavering support and numerous initiatives aimed at fostering relationships with fintechs to jointly win in the marketing place, stressing that the bank has put structures and initiatives in place to collaborate and cooperate with fintechs to facilitate the bank’s vision of financial integration of Africa.

“As a bank, one of our strategic objectives is to bank 100 million Africans, across Africa. We won’t go out there with account opening documents to do this. We believe we can achieve that by collaborating and cooperating across the board, and the fintechs come into that space.

“We came out with Ecobank as a service, this is at the heart of why we published our sandbox to encourage fintechs, big techs and any player that wants to do business in Africa to ride on our platforms and help facilitate our vision of a financially integrated Africa. We see ourselves as a key player in the African Continental Free Trade Area (AfCFTA) and we believe we are the ultimate bank to facilitate trade across Africa,” he said.

The Africa Fintech Summit is a global knowledge-sharing platform that connects innovators, regulators and entrepreneurs, facilitating conversations and partnerships that help them explore financial technology solutions to improve African individuals, economies and societies.

It is held twice a year in Washington DC and a selected African country and sees stakeholders from around the world assemble to chart a progressive course for fintech in Africa by mobilizing investments, hashing out enabling policies, and sharing growth strategies.

The programme, which was the seventh edition, also recognized TeamApt for Excellence in Digital Banking, PiggyVest- Excellence in Savings and InvestTech, Flutterwave-Excellence in Fintech Infrastructure, while Excellence in Blockchain Technology went to Appzone Group. Others are Excellence in Fintech investment – Future Africa, Excellence in Cryptocurrency – Paxful, Excellence in Ecosystem Research – Briter Bridges, Excellence in Cross-border Solutions – PAPSS, Excellence in Payments – Paystack, Excellence in InsurTech – Turaco, Excellence in Fintech and Lending – Payhippo, Excellence in Embedded Fintech – Cellulant and Excellence in TradeTech – AFEX.

Ecobank has many initiatives to support the growth of fintechs on the continent. The Ecobank Fintech Challenge launched in 2017 identifies and partners with fintechs that are ready to scale, providing them with mentoring, networking, support, and opportunities to access Ecobank’s 33 African markets, as well as opportunities to integrate with existing Ecobank digital offerings. This has recorded significant results and success stories since its inception.

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Banking

Court Orders CBN, NDIC to Pay 1,116 Bank Workers N5.7bn

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CBN IMTOs

By Adedapo Adesanya

The National Industrial Court has ordered the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) to pay over N5.7 billion as terminal benefits to over 1,116 bank workers affected by the re-capitalisation exercise of 2006.

The money is to be paid within three months from the date of judgment as failure to adhere to this will attract 10 per cent interest until liquidated.

Justice Paul Bassi, at the court sitting in Lagos on Monday, made the order while delivering judgment in the case filed by the 1,116 claimants who had approached the court since 2018.

The court also ordered the CBN and the NDIC to pay another N10 million as general damages to the claimants.

The ruling settles the battle that the parties have fought since the consolidation exercise of 2006 which saw banks recapitalised from N2 billion to N25 billion.

Some banks did not meet the recapitalisation requirements and this led to their banking licenses being revoked by the central bank which appointed the NDIC as the liquidator.

The bank workers then sued the two organisations demanding the payment of their terminal benefits.

The two defendants raised several objections, insisting among other things they were not the employers of the workers and the suit disclosed no cause of action against them.

In his judgment, Justice Bassi dismissed the preliminary objections of the defendants and held while they may have acted for the general good by raising the capital base of banks in the country, it should not be done at the expense of the former employees.

By revoking the banking licenses of the non-consolidated banks, the defendants interfered with the employment contracts of the bank workers, a contract which would ordinarily have run its natural course with the claimants paying their benefits at the end.

The court then ordered the CBN and the NDIC to pay the workers within three months from the date of judgment failing which it will attract 10 per cent interest until liquidated.

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Banking

Sterling Bank Offers Optometrists Loans at Competitive Interest Rates

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sterling bank logo

By Modupe Gbadeyanka

A Memorandum of Understanding (MoU) aimed to automate operations, enhance capacity and provide loans at competitive interest rates for optometrists has been signed by Sterling Bank Plc and the Nigerian Optometrist Association (NOA).

Under the deal, members of the association will be able to borrow from the Central Bank of Nigeria (CBN) intervention for the health sector at 5 per cent as well as obtain template credit from the bank within 48 hours at a competitive interest rate of 20 per cent, which is below the prevailing rate in the banking industry.

Business Post gathered that Sterling Bank has earmarked N10 billion for the entire health care sector in the country and would accommodate any level of funding optometrists may require.

The Group Head of Health Finance at Sterling Bank, Mrs Ibironke Akinmade, while speaking at the signing ceremony in Lagos, explained that the initiative is part of the lender’s vision to be the leading bank for businesses in the health sector.

The Head of Health Finance said the rationale behind the partnership with NOA is to further position Sterling Bank as the bank of choice for businesses in the health sector, adding that this means more business collaboration and partnership with stakeholders in the health space.

“We have adopted a community approach in engagement with stakeholders in this sector. This will not only give us leverage to develop tailor-made propositions for the community, but it also creates an inroad for engagement of their members through a cluster approach,” she said.

Mrs Akinmade said the bank recently engaged the NOA in a bid to scale on its offerings to the health sector, which includes access to finance (template credit), and access to digitalisation (payment platforms and Electronic Medical Records) as well as advisory services, among others.

Also speaking, Dr Obinna Awiaka, President of NOA, said the association wants a bank that would help its members to grow and discovered that Sterling is the only bank that has a passion for the healthcare sector.

He said the relationship between members of his association and the bank will build the economy because once the healthcare industry is built the economy will also be built.

Dr Awiaka said the NOA is satisfied with the relationship with Sterling Bank because in no distant time the bank, in conjunction with healthcare professionals, will help to develop the sector, which will translate to a better future for the country.

He said the development will make Nigerian professionals that are leaving the country in droves return to the country to practice and this will reduce medical tourism among the country’s leaders, thanking Sterling Bank for coming on board and taking the bull by the horn to support the healthcare industry.

The NOA was established in 1968 and is the prime umbrella association representing over 5,000 doctors of optometry across the 36 states of the country and the Federal Capital Territory (FCT), Abuja, as well as all other optometric interest groups in Nigeria.

Since 2018, Sterling Bank has concentrated investment in five sectors of the economy under its HEART strategy in a bid to make an impact on the country’s economic development. The five sectors in HEART’s strategy include health, education, agriculture, renewable energy and transportation.

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