Banking
Zenith Bank’s Earnings Will Remain Broadly Stable, Upgrade Remote—S&P
By Modupe Gbadeyanka
S&P Global Ratings has disclosed that Zenith Bank will continue to display better asset quality indicators than its domestic peers and sound revenue generation over the next 12-18 months despite the generally slow economic recovery in Nigeria.
The rating agency made this observation while affirming its ‘B’ long-term and ‘B’ short-term issuer credit ratings on the Nigeria-based lender with stable outlook. It also affirmed its national scale ratings on the bank at ‘ngA/ngA-1’.
According to S&P, as of June 30, 2018, Zenith Bank had total assets of N5.3 trillion (approximately $15.3 billion), making it the second-largest bank in Nigeria, pointing out that the financial institution has a strong corporate franchise in the country and has displayed both healthy revenue generation and earnings stability, despite the challenging operating conditions in Nigeria over the past couple of years.
“We assess Zenith’s capital and earnings as moderate. The bank’s S&P Global Ratings’ risk-adjusted capital (RAC) ratio before adjustments reached 5.4 percent at end-2017, compared with 5.1 percent a year earlier.
“We expect this ratio will be 5.2 percent to 5.5 percent over the next 12-18 months. We factor into our RAC calculation our expectations that loan growth will be 3 percent in 2018 and 10 percent in 2019, and that interest margins will show a slight increase (balancing our expectation of a reduction in expensive fixed deposits and redemption of its $500 million Eurobond in April 2019).
“We also consider Zenith Bank’s good fees and commission generation, and its dividend payout ratio of about 50 percent,” the rating company said in the statement released last Thursday.
According to the statement, Zenith Bank’s asset quality metrics improved somewhat in the first half of 2018, with credit costs declining to 0.9 percent and coverage by loan loss reserves increasing to 229 percent (following the implementation of International Financial Reporting Standards (IFRS) 9 and including Stage 1 and Stage 2 provisions).
This compares with credit costs of 4.3 percent and a coverage ratio of 143 percent at year-end 2017. In the six months to June 30, 2018, nonperforming loans (NPLs) declined in absolute terms, but increased in relative terms.
It accounted for 4.9 percent of the loan book, compared with 4.7 percent at year-end 2017. Although restructured exposures increased to around 12.6 percent of total loans at mid-2018, compared with 11.8 percent a year earlier, S&P expects asset quality indicators to remain broadly stable, because it does not anticipate material migrations of these exposures to NPLs.
“We therefore believe that the bank’s cost of risk will stabilize at around 1.2 percent in the next 12-18 months,” it said.
The firm pointed out that Zenith Bank is mainly deposit-funded, which has resulted in a stable funding base.
It recorded a stable funding ratio of 151.4 percent on the back of a healthy proportion of deposit funding at mid-2018. Broad liquid assets covered 1.9x of total wholesale funding and net broad liquid assets accounted for 64.2 percent of short-term customer deposits at the same date. “However, given the short-dated nature of the bank’s deposit profile, which is a feature it shares with its domestic peers, Zenith Bank’s deposit base is confidence-sensitive.
“The stable outlook on Zenith reflects that on Nigeria, and our expectation that the bank’s earnings and asset quality metrics will remain broadly stable over the next 12-18 months.
“We would lower the ratings on the bank if we lowered the ratings on Nigeria, or if we see a material deterioration in the bank’s asset quality indicators.
“An upgrade appears remote in the next 12 months, because it would hinge on an upgrade of Nigeria or a material strengthening of the bank’s capitalization, all other factors remaining equal,” the statement said.
By Modupe Gbadeyanka
The Chartered Institute of Bankers of Nigeria (CIBN) has promised to support the ambitious plans of the Association of Corporate and Marketing Professionals in Banks (ACAMB).
At a meeting between the leaderships of the two organisations on Tuesday, the president of CIBN, Professor Pius Deji Olanrewaju, said it was impressed with the capability development and the undergraduate mentorship schemes of ACAMB under its leader, Mr Jide Sipe.
The CIBN chief commended the forward-thinking vision of the group, saying it had raised standards across Nigeria’s banking sector.
“ACAMB’s support has given CIBN and the banking sector brand equity,” he said, praising the association’s record in reputation management. recalling ACAMB’s role in addressing crises within the sector, describing the partnership as strategic and beneficial.
He further pledged support for ACAMB’s 30th anniversary in September 2026, its AGM, and other programmes, including fundraising initiatives.
“I want to assure you that everything you have presented today has been clearly noted and will be acted upon.
“We are fully committed to working closely with you so as to translate these discussions and vision into measurable progress. Our shared goal is to strengthen the sector, protect its reputation, and enhance its public image in a meaningful and lasting way.
“This meeting discussed various initiatives and reforms crucial for the future of our industry, including the need for continuous training and adaptation to new programs,” Mr Olanrewaju stated.
Speaking at the meeting, the president of ACAMB described the visit as a crucial first step in his tenure, aimed at contributing significantly to giving flight to his vision and that of ACAMB.
“When we assumed office, one of the first things we agreed on was the need to visit key stakeholders.
“However, before reaching out more broadly, we felt it was important to begin with our primary constituency and core stakeholders. We want them to understand the direction we are taking and to support the work we are doing, so that ACAMB can achieve greater success than it has in the past.
“We couldn’t have properly started our tenure without this very important meeting with the CIBN,” Mr Sipe stated
He introduced the newly constituted ACAMB Exco, which includes the 2nd Vice President, Morolake Phillip-Ladipo; General Secretary, Olugbenga Owootomo; Assistant General Secretary, Ademola Adeshola; Publicity Secretary, Abiodun Coker; and Executive Secretary, Fadekemi Ajakaiye.
By Modupe Gbadeyanka
Registration for the second HerFidelity Apprenticeship Programme (HAP 2.0) organised by Fidelity Bank Plc has commenced.
The Divisional Head of Product Development at Fidelity Bank, Mr Osita Ede, informed newsmen that the initiative was designed to empower women with sustainable entrepreneurship skills.
The lender created the flagship women-empowerment initiative to equip women with practical, income‑generating skills and structured pathways to entrepreneurship.
“HerFidelity Apprenticeship Programme 2.0 reflects our commitment to continuous improvement. Having evaluated feedback from the first edition, we have returned with stronger partnerships and deeper mentorship programmes to ensure that women acquire not just skills, but sustainable economic opportunities,” he said.
“At the heart of the programme is guided, real‑world learning. Participants will undergo intensive apprenticeship training under reputable institutions and industry experts across select fields such as hair styling, shoe making, auto mechatronics, and interior decoration,” Mr Ede added.
He noted that HerFidelity Apprenticeship Programme 2.0 goes beyond skills acquisition by offering participants a wide range of business advisory services. These include business and financial literacy training, mentorship support throughout the apprenticeship journey, access to Fidelity Bank’s women‑focused and SME financial solutions, as well as guidance on business formalisation and growth strategies.
Further emphasising the bank’s vision, Mr Ede said, “By integrating structured mentorship with entrepreneurial development, Fidelity Bank is positioning women not just as trainees, but as future employers, innovators, and economic contributors within their communities. This aligns with our mandate to help individuals grow, businesses thrive, and economies prosper.”
By Modupe Gbadeyanka
A new branch of The Alternative Bank (AltBank) has been opened in Ondo State as part of the expansion drive of the financial institution.
A statement from the company disclosed that the new branch would support export-oriented agribusinesses through Letters of Credit and commodity-backed trade finance, ensuring that local producers can scale beyond state borders.
For SMEs, the bank is introducing robust payment rails, asset financing for equipment and inventory, and supply chain-backed facilities that strengthen working capital without trapping businesses in interest-based debt cycles.
The Governor of Ondo State, Mr Lucky Aiyedatiwa, represented by his Chief of
Staff, Mr Olusegun Omojuwa, at the commissioning of the branch, underscored the importance of financial institutions in economic development.
“The pivotal role of financial institutions to economic growth and development of any economy cannot be overemphasised. It provides access to capital, supporting small and medium-scale enterprises and encouraging savings.
“Therefore, I have no doubt in my mind that the presence of The Alternative Bank in Ondo State will deepen financial services, create employment opportunities and stimulate economic activities across various sectors,” he said.
In her remarks, the Executive Director for Commercial and Institutional Banking (Lagos and South West) at The Alternative Bank, Mrs Korede Demola-Adeniyi, commended the state government’s leadership and outlined the lender’s long-term vision for Ondo State.
“As Ondo State steps into its next fifty years, and into the future anchored on the sustainable development championed during the recent anniversary celebrations, The Alternative Bank is here to be the financial engine for that vision. We didn’t come to Akure to hang banners. We came to fund work, farms, shops, and factories.”
With Ondo State’s economy anchored largely on agriculture, particularly cocoa production, poultry farming, and other cash crops, alongside a growing SME and trade ecosystem, AltBank is deploying sector-specific financing solutions tailored to these strengths.
For cocoa aggregators, processors and poultry operators, the bank will provide production financing, facility expansion support, machinery lease structures, and structured trade facilities under its joint venture and cost-plus financing models, with transaction cycles of up to 180 days for commodity trades and longer-term structured asset financing for equipment and infrastructure.
The organisation is a notable national non-interest bank with a physical network now surpassing 170 locations, deploying capital to solve real-world challenges through initiatives such as the Mata Zalla project, which saw to the training of hundreds of women as electric tricycle drivers and mechanics.
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