Modupe Gbadeyanka
By Modupe Gbadeyanka
On Friday, the board of Zenith Bank Plc released the company’s financial statements for the year ended December 31, 2019.
In the earnings, Zenith Bank clearly showed its resilience and market leadership by becoming the first bank in Nigeria to declared a profit after tax of over N200 billion. In the period under review, the firm raked N208.8 billion as profit for the year. This was 8 percent higher than N193 billion recorded in the previous year.
In the same vein, profit before tax increased by 5 percent growing from N232 billion to N243 billion in the current year, arising from topline growth and continued focus on cost optimisation strategies. Cost-to-income ratio moderated from 49.3 percent to 48.8 percent.
Business Post reports that Zenith Bank increased its market share as it secured increased customer deposits across the corporate and retail space as deposits grew by 15 percent to close at N4.26 trillion, while the total assets also increased by 7 percent from N5.96 trillion to N6.35 trillion.
In the period under review, the bank created new viable risk assets as gross loans grew by 22 percent from N2.016 billion to N2.462 billion. This was executed prudently at a low cost of risk of 1.1 percent and a significant reduction in the non-performing loan ratio from 4.98 percent to 4.30 percent.
Prudential ratios such as liquidity and capital adequacy ratios also remained above regulatory thresholds at 57.3 percent and 22.0 percent respectively.
Also, there was a growth in gross earnings, rising by 5 percent to N662.3 billion from N630.3 billion reported in the previous year. This growth was driven by the 29 percent 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 108 percent year-on-year 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.
The drive for cheaper retail deposits coupled with the low interest yield environment helped reduce the cost of funding from 3.1 percent to 3.0 percent. However, this also affected net interest margin which reduced from 8.9 percent to 8.2 percent in the current year due to re-pricing of interest-bearing assets.
Although returns on equity and assets held steady YoY at 23.8 percent and 3.4 percent respectively, the group still delivered an improved Earnings per Share (EPS) which grew 8 percent from N6.15 to N6.65 in the current year.
Zenith Bank said it 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.
