Despite headwinds, Zenith Bank has announced a remarkable double-digit growth across its operating units in the third quarter (Q3) of 2022.
Gross earnings grew by 20% to N620.6 billion in the period from N518.7 billion reported in Q3 of 2021, the bank’s unaudited financial statement obtained by Investors King has shown.
According to the unaudited financial statement accessed via the Nigerian Exchange (NGX), growth in the quarter was largely driven by interest and non-interest income.
Interest income grew by 27% from N308.8 billion in Q3 2021 to N390.8 billion in Q3 2022, driven majorly by growth in risk assets and an improvement in pricing. This also strengthened Earnings Per Share (EPS) by 9% to N5.55.
This double-digit growth in the topline also aided the bottom line, as the Group also recorded a 13% year-on-year (YoY) increase in profit before tax from N179.8 billion in Q3 2021 to N202.5 billion in Q3 2022.
Profit after tax equally grew by 9% to N174.3 billion in the same period, up from N160.6 billion recorded in Q3 2021.
Growth in non-interest income was enabled by the Group’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%. However, this was below the growth in gross earnings (20%), 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% to 1.7% in the current period. This affected 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.
Total assets grew by 20% from N9.45 trillion to N11.34 trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 24% from N6.47 trillion in December 2021 to N8.04 trillion in September 2022 due to the market’s confidence in the brand.
Loans and advances also grew by 16% from N3.5 trillion in December 2021 to N4.06 trillion in September 2022, boosting the Group’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 from 21% to 19.1%, while the liquidity ratio reduced from 71.6% to 68.9%. Both prudential ratios remain very strong and are still well above regulatory thresholds.
In the year’s final quarter, management is determined 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.
Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, including being recognised as Number One Bank in Nigeria by Tier-1 Capital, for the 13th consecutive year, in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine; Best Bank in Nigeria, for three consecutive years from 2020 to 2022, in the Global Finance World’s Best Banks Awards; Best Commercial Bank, Nigeria 2021 and 2022 in the World Finance Banking Awards; Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards 2022; Best in Corporate Governance’ Financial Services’ Africa, for three consecutive years from 2020 to 2022, by the Ethical Boardroom; Best Commercial Bank, Nigeria and Best Innovation In Retail Banking, Nigeria in the International Banker 2022 Banking Awards. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.
Similarly, Zenith Bank was honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.
