Zenith Bank Group posts strong results in 2022 — Declares dividend for year in review
The Zenith Bank Group posted gross earnings of 945.5 billion Naira at the end of the 2022 financial year.
This represents a double-digit growth of 24 per cent from the 765.6 billion Naira the bank reported the previous year.
The Group in its 2022 audited financial results, which was presented to the Nigerian Exchange (NGX), explained that the double-digit growth in gross earnings was driven by a corresponding 26 per cent year-on-year (YoY) growth in interest income from 427.6 billion Naira to 540.2 billion Naira and a 23 per cent year-on-year (YoY) growth in non-interest income from 309 billion Naira to 381 billion Naira.
The feat, it said, was in spite of the persistent challenging macroeconomic environment and the headwinds it faced in the period under review.
Consequently, it recorded profit before tax growth of two per cent Year on Year (YoY) from 280.4 billion Naira in 2021 to 284.7 billion Naira in 2022, a development which led to a profit after tax of 223.9 billion Naira in the same period.
The Group, consequently, proposed final dividend pay-out of 2.90 Naira per share which brings the total dividend for the year to 3.20 Naira per share.
There was, however, a marginal decrease in its return on assets which dropped from 2.7 per cent to 2.1 per cent due to the significant growth in the balance sheet.
On the other hand, the Group impairments grew by 106 per cent from 59.9 billion Naira to 123.4 billion Naira, while interest expense grew by 63 per cent YoY from 106.8 billion Naira to 173.5 billion Naira, respectively, according to the report.
The impairment growth, which also resulted in an increase in the cost of risk from 1.9 per cent in 2021 to 3.2 per cent in the current year, included the impact of Ghana’s sovereign debt restructuring programme.
This, however, the Group said, did not heavily impact on the operations of the Ghana subsidiary as “Zenith Bank Ghana still maintains a substantial capital and liquidity buffer to continue to operate at its optimum best.”
The growth in interest expense increased cost of funds which grew from 1.5 per cent in 2021 to 1.9 per cent in 2022 due to hikes in interest rates globally.
Customer deposits, on the other hand, the Group said, increased significantly by 39 per cent, up from 6.47 trillion Naira in 2021 to 8.98 trillion Naira in 2022.
According to the Group, the growth in customer deposits cuts across all products and deposit segments (corporate and retail), consolidating the Group’s market leadership “and the confidence customers have in us.”
Regarding the Group’s net-interest-margin (NIM), it mentioned that the continued elevated yield environment positively impacted the NIM, which grew from 6.7 per cent to 7.3 per cent due to an effective repricing of its interest-bearing assets.
While the Group’s operating expenses grew by 17 per cent YoY, cost growth was controlled and remains below the inflation rate.
Total assets increased by 30 per cent, growing from 9.45 trillion Naira in 2021 to 12.29 trillion Naira mainly as a result of the rapid growth in customer deposits.
The Group said with the steady and continued recovery in economic activities, it prudently grew its gross loans by 18 per cent, from NGN3.5 trillion in 2021 to NGN4.1 trillion in 2022, leading to a marginal increase in the non-performing loan (NPL) ratio from 4.2 per cent to 4.3 per cent YoY.
The capital adequacy ratio decreased from 21 per cent to 19.8 per cent while the liquidity ratio improved from 71.6 per cent to 75 per cent. Both prudential ratios are well above regulatory thresholds according to the Group.
This year, the Group hinted of its intention to expand its frontiers as it also reorganises into a holding company structure adding new verticals to its businesses and growing in all its markets, both locally and internationally.