Banking
Zenith Bank Customer Deposits Swell to N8.04trn in Nine Months
By Dipo Olowookere
Zenith Bank Plc has again demonstrated that its shareholders can go into a deep sleep, knowing that the company is in safe hands and their investments will continue to grow.
On Thursday, the financial institution announced its unaudited results for the third quarter ended September 30, 2022, with gross earnings growing by 20 per cent to N620.6 billion from the N518.7 billion achieved in the same period of last year.
The organisation generated more revenue from its various business segments despite a challenging macroeconomic environment, which has put some companies under pressure.
It was observed that the top line was driven by interest and non-interest income growth, with the former rising by 27 per cent to N390.8 billion from N308.8 billion due to growth in risk assets and an improvement in pricing, strengthening earnings per share (EPS) by 9 per cent to N5.55.
As for the latter, the non-interest income, it was boosted by the firm’s retail strategy, with continued substantial customer acquisition driving transactions, deposit growth and growth in electronic banking income.
Due to inflationary pressure and the rising cost of doing business, operating costs grew by 17 per cent, which was below the 20 per cent growth in gross earnings, thereby facilitating the double-digit growth in the bottom line.
The continuing elevated yield environment affected the cost of funding which increased from 1.4 per cent to 1.7 per cent in the current period, affecting the net interest margin (NIM), which dropped due to the immediate implementation of higher yields on interest-bearing liabilities.
However, the NIM is expected to see a correction in subsequent quarters as the assets side is repriced correspondingly.
A look at the bottom line showed that Zenith Bank recorded a 13 per cent increase in profit before tax to N202.5 billion from N179.8 billion in Q3 2021, while the profit after tax expanded by 9 per cent to N174.3 billion from N160.6 billion.
As for the balance sheet, the total assets grew by 20 per cent from N9.45 trillion to N11.34 trillion, mainly due to the 24 per cent growth in customers’ deposits to N8.04 trillion in September 2022 N6.47 trillion in December 2021 as a result of the market’s confidence in the brand.
Loans and advances also grew by 16 per cent from N3.5 trillion in December 2021 to N4.06 trillion in September 2022, boosting the lender’s interest income and displaying the group’s appetite for high-yielding risk assets creation.
As a result of this growth, the capital adequacy ratio reduced to 19.1 per cent from 21 per cent, while the liquidity ratio reduced to 68.9 per cent from 71.6 per cent. Both prudential ratios remain very strong and are still well above regulatory thresholds.
The management has expressed its determination to sustain the strong performance trajectory while adapting to changes in the regulatory environment and focusing on creative initiatives to mitigate inflationary trends, foreign exchange pressures and the growing competitive environment.
By Aduragbemi Omiyale
The Central Bank of Nigeria (CBN) has reaffirmed that the old and new Naira notes will continue to be used for financial transactions in the country beyond December 31, 2024.
There had been rumours that the old and redesigned N200, N500, and N1,000 banknotes would no longer be legal tender from Wednesday, January 1, 2025, because the central bank would phase out the notes in compliance with a Supreme Court judgement of November 29, 2023.
But the apex bank, in a statement signed by its acting Director of Corporate Communications, Mrs Hakama Ali, on Friday, clarified that the apex court’s judgement being cited did not authorise the bank to phase out the banknotes by the end of this year.
According to her, the court allowed the CBN to leave the old and new notes to be used concurrently until it decides to gradually phase out the former.
The central bank’s spokesperson urged members of the public to disregard claims suggesting the old series of these denominations would cease to be valid at the end of this year.
She urged them to continue to accept all Naira notes for daily transactions, encouraging banks to also adopt alternative payment methods such as electronic channels to reduce the pressure on physical cash usage.
“The Central Bank of Nigeria (CBN) has observed the misinformation regarding the validity of the old N1000, N500, and N200 banknotes currently in circulation.
“In line with the bank’s previous clarifications and to offer further assurance, the CBN wishes to reiterate that the subsisting Supreme Court ruling granted on November 29, 2023, permits the concurrent circulation of all versions of the N1000, N500, and N200 denominations of the Naira indefinitely.
“For the avoidance of doubt, all versions of the naira, including the old and new designs of N1000, N500, and N200 denominations, as well as the commemorative and previous designs of the N100 denomination, remain valid and continue to be legal tender without any deadlines,” the statement noted.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
The Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
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