Zenith Bank, Nigeria’s largest lender by market capitalization, has recorded its highest profit in seven years, suppassing market expectation with double digit growth in gross earnings.
Analysis by Businessday has shown the company’s profit after tax grew by 6 percent to N244.5 billion in the full year 2021 compared to N230.5 billion in the full year of 2020. Zenith Bank shares are up 8.4 percent year-to-date.
Gross earnings rose to N765.5 billion in 2021, a 10 percent increase compared to N696.4 in the previous year.
“This was on the back of 23 percent YoY growth in non-interest income from N251.7 billion to N309 billion and a 2 percent YoY growth in interest income from N420.8billion to NGN427.6 billion,” the company said in a statement.
Net income on fees jumped to N104 billion in 2021, a 31 percent increase from N79.3 billion in the corresponding period last year.
The lender’s trading gains rose by 37.6 percent to N167.4 billion from N121.6 billion in the period under review.
Profit before tax jumped by just 9.4 percent to N280 billion compared to N256 billion in the year ago period.
Customer deposits increased by 21 percent, growing from N5.34 trillion in the previous year to N6.47 trillion in the current year.
“The growth in customer deposits came from both corporate and retail customers. Retail deposits grew by N146 billion from N1.72 trillion in 2020 to NGN1.87 trillion in 2021. The Group’s continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1 percent to 1.5 percent in the current year,” the company stated.
Assets grew 10.6 percent to N9.4 trillion in the full year 2021 from N8.5 trillion in the full year 2020. The Group recorded impressive liquidity and capital adequacy ratios of 71.6 percent and 21 percent, which remained above regulatory thresholds of 30 percent and 15 percent, respectively.
Personnel expenses rose to N79.8 billion in 2021 compared to N79.5 percent in the corresponding period last year.
Dividend income gained to N2.7 billion in the full year 2021, an increase of 58.8 percent from N1.7 billion in the comparable period last year.
However, income expenses dipped 11.8 percent to 106.8 billion in 2021 from 121.1 billion in the corresponding period last year.
The lender’s Net income on fees and commission surged 31 percent to N104 billion from N79.3 billion in the year ago period.
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Income tax expense rose by 41.5 to N35.8 billion compared to N25.3 billion in the comparable periods.
Depreciation of property and equipment climbed to N25.3 compared to 25.1 in the previous year.
Zenith bank’s impairment charge jumped by a whooping 490 percent to N7.79 billion in the period under review from N1.32 billion in the corresponding period last year.
Amortisation of intangible assets increased to N3.7 billion in the full year 2021, a 5.7 percent increase compared to N3.5 billion in the full year 2020.
Earning per share grew 6 percent to N7.78 from N7.34 in the comparable periods.
In 2022, the Group intends to consolidate on the gains achieved in the previous year in all business segments and combine leadership in the industry, innovation and technology to drive improved performance and deliver enhanced returns to all stakeholders.
As a testament to its commitment to its shareholders, the bank has announced a proposed final dividend payout of N2.80 per share, bringing the total dividend to N3.10 per share.
