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Zenith Bank Celebrates Record-Breaking Performance in 2023

Zenith Bank Plc has unveiled its audited financial results for the year ended December 31, 2023, showcasing an exceptional triple-digit growth of 125% in gross earnings, soaring from NGN945.6 billion in 2022 to NGN2.132 trillion in 2023. The results, presented to the Nigerian Exchange (NGX), further reveal a staggering Year-on-Year (YoY) surge of 180% in Profit Before Tax (PBT) from NGN284.7 billion in 2022 to NGN796 billion in 2023. Similarly, Profit After Tax (PAT) witnessed a triple-digit growth of 202%, surging from NGN223.9 billion to NGN676.9 billion in the year under review.

This remarkable growth in gross earnings is attributed mainly to the robust expansion in both interest and non-interest income. Interest income saw a surge of 112%, climbing from NGN540 billion in 2022 to NGN1.1 trillion in 2023. Concurrently, non-interest income experienced a growth of 141%, escalating from NGN381 billion to NGN918.9 billion during the same period. The surge in interest income can be credited to the expansion of risk assets, their effective repricing, and the uptick in the yield of other interest-bearing instruments throughout the year. Meanwhile, the growth in non-interest income was propelled by significant trading gains and an uptick in gains from foreign currency revaluation.

Despite the cost of funds rising from 1.9% in 2022 to 3.0% in 2023, attributable to the prevailing high-interest rate environment, interest expense surged by 135%, from NGN173.5 billion in 2022 to NGN408.5 billion in 2023. However, the Group’s cost-to-income ratio showed a significant improvement, dropping from 54.4% in 2022 to 36.1% in 2023, despite a 32% growth in operating expenses.

This improvement is primarily attributed to the enhanced top-line performance. The Return on Average Equity (ROAE) saw an impressive growth of 118%, rising from 16.8% in 2022 to 36.6% in 2023, supported by improved gross earnings, as the Group focused on delivering superior shareholder returns. Similarly, the Return on Average Assets (ROAA) surged by 95%, from 2.1% to 4.1% during the same period.

Zenith Bank has further solidified its market leadership in both corporate and retail deposit segments, witnessing a 69% increase in customer deposits, which grew from NGN9.0 trillion to NGN15.2 trillion in 2023. The bank’s retail strategy continues to bear fruit, with retail deposits now accounting for 46% of total deposits, up from 44% in 2022, and growing by 77% from NGN3.97 trillion in 2022 to NGN7.04 trillion in 2023. This growth further underscores the increasing confidence customers have in the Zenith brand.

The bank’s total assets saw a 66% increase, rising from NGN12.3 trillion in 2022 to NGN20.4 trillion in 2023, largely driven by the growth in total deposits and the revaluation of foreign currency deposits. Gross loans grew by 71% from NGN4.1 trillion in 2022 to NGN7.1 trillion in 2023, due to the revaluation of foreign currency loans and growth in local currency risk assets. Despite this growth, the disciplined approach to risk asset creation and management ensured a marginal increase in the Non-Performing Loans (NPL) ratio from 4.3% to 4.4%.

In recognition of its commitment to shareholders, the bank has declared a proposed final dividend payout of NGN3.50 per share, bringing the total dividend for the year to NGN4.00 per share.

Looking ahead to 2024, Zenith Bank plans to transition to a holding company structure, positioning itself to explore emerging opportunities in the Fintech sector and strengthening its digital and retail banking initiatives. Additionally, the Group is taking proactive measures to meet the new minimum NGN500 billion equity capital requirement, as stipulated by the Central Bank of Nigeria (CBN), to maintain its international authorization within the specified timeframe. This strategic move aims to fortify the bank’s presence in key markets, paving the way for sustainable growth and enhanced value creation for its stakeholders.

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