Zenith Bank remains unbeatable —Analysts




Investors have always been excited with the stock of Zenith Bank. In fact, at the share price of N24.85 per share, investors exchanged 24.2 million shares in 321 deals on Friday July 23, 2021. Good returns has been the attraction to the bank. Zenith Bank has paid the highest dividend in the banking industry over the years. Last year 2020, the bank paid dividend of N94. 19 billion total dividend (translating to N3 dividend per share) for the 2020 financial year after getting stockholders’ nod for cumulative final dividend payout of N84. 77 billion (translating to N2. 70 dividend per share) on May 17, 2021.

This, in addition to qualitative customer services have remained the attraction to the bank which has carted away many awards over the years. Analysts believe that Zenith bank has remained unbeatable given its antecedents, drive and focus.

Commenting on the banks’ impressive performance, Managing Director of High Cap Securities Limited, Mr. David Adonri, told Business Hallmark that the management of Zenith Bank has not only continued to be focused but that it has also utilized the advantages of technology and digital incursions to push its operations, especially in this Covid-19 period.

Recently, the bankrecorded an addition to its many laurels, emerging the Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021.

According to the July 2021 edition of the World Finance Magazine, the rank was based on individual banks’ ability to adapt to a continually evolving technological environment while maintaining top-class customer relations and bolstering their financial footing amidst the upheaval of the COVID-19 pandemic.

This comes barely two weeks after the tier 1 lender emerged as the best lender in the West African sub-region, according to data released by the Banker Magazine, a subsidiary of the Financial Times Group.

Earlier in June, Zenith Bank, for the second consecutive year, was named as the Best Corporate Governance ‘Financial Services’ Africa 2021 by the Ethical Boardroom. The award, which was published in the June 2021 edition of The Ethical Boardroom magazine, was in recognition of the bank’s adherence to global best practices and institutionalization of corporate governance, setting an industry-wide example of best practices in that field.

It has been award and recognition galore for the bank in recent times driven by its track record of excellent performance and commitment to global best practices. Zenith Bank was voted as Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021.
Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking by The Banker Magazine among many others.

Zenith Bank has been generally adjudged a Corporate Governance compliant bank by the Nigerian Stock Exchange (NSE), hence its listing on the Premium Board of the Exchange. The bank continues to sustain this reputation and reappraise its processes to ensure that its business conforms to the highest global standards at all times.

Commenting on the latest award, the Group Managing Director/Chief Executive Officer, Zenith Bank Plc, Mr. Ebenezer Onyeagwu said: “This recognition reflects our resilience and ability to adapt to a very challenging macroeconomic environment exacerbated by the COVID-19 pandemic, as well as our commitment to creating value for our teeming customers through our best-in-class service and innovative products and solutions.”

The resilience reflected clearly in the bank’s impressive results for the first quarter ended 31st March 2021, with Profit Before Tax (PBT) rising by 4% to N61.0 billion, compared to N58.8 billion recorded in the corresponding period of 2020.

According to the unaudited statement of account presented to the Nigerian Stock Exchange (NSE) on Friday, 30th April 2021, Profit After Tax (PAT) also grew by 5% from N50.5 billion in Q1 2020 to N53.1 billion in Q1 2021, despite the challenging macroeconomic environment aggravated by the COVID-19 pandemic.

The profitability, the Bank said, was driven by the optimisation of the cost of funds and improvement in non-interest income. The Bank’s cost of funds reduced significantly from 2.6% in March 2020 to 1.1% in March 2021. This was also reflected in interest expense which dropped by 45% from N32.8 billion to N18.0 billion over the same period. Non-interest income increased by 10% from N46.6 billion to N51.2 billion, driven by growth in credit-related fees and fees on electronic products.

Non-interest income was boosted by the increase in fees and commission income, which resulted from the increased volume of transactions across all the Bank’s channels. Cost of risk dropped from 0.6% in March 2020 to 0.5% in March 2021, which affirms the Bank’s prudent risk management, even as gross loans increased by 2% from N2.92 trillion to N2.98 trillion in Q1 2021.

The Bank’s customer acquisition strategy and the effectiveness of its electronic platforms and digital channels enabled it to deliver a N54 billion increment in the savings account balance, which is solely retail. Customer deposits grew by 6% from N5.34 trillion in December 2020 to N5.68 trillion in March 2021. Transactions on electronic channels also grew astoundingly as new customers continue to be attracted to the Bank’s various user-friendly digital platforms.


Going forward in 2021, the Bank expects that the ongoing economic recovery and improvements in the yield environment will translate into improved numbers for the Group. This is expected to be supported by local and international COVID-19 vaccination campaigns, rising commodity prices, and global economic growth of up to 6%, as estimated by the International Monetary Fund (IMF). The Group will continue to position itself to take advantage of positive developments in the domestic and global economy to deliver improved financial performance and returns to all its stakeholders.

Its 2020 year end results revealed a year-on-year growth of 10% in profit after tax (PAT) from N208.8 billion recorded in 2019 to N230.7 billion. According to its audited financial results for the 2020 financial year, the Group recorded a growth in gross earnings of 5% from N662.3 billion in the previous year to N696.5 billion.

The Group also recorded 8% growth in non-interest income from NGN232.1 billion in 2019 to NGN251.7 billion in 2020 and a 1% increase in interest income from NGN415.6 billion in 2019 to NGN420.8 billion in 2020. Profit before tax (PBT) also increased by 5%, growing from N243.3 billion in 2019 to N255.9 billion in the year under review. Interest expense reduced from N148.5 billion in 2019 to N121.1 billion in 2020, significantly increasing the net interest income from NGN267.0 billion in 2019 to NGN299.7 billion in 2020.

Its total assets also increased significantly by 34%, from N6.35 trillion to N8.48 trillion. Despite the COVID-19 pandemic and its associated challenges, the Group created new viable risk assets as gross loans grew by 19%, from N2.46 trillion to N2.92 trillion.

With its core business strategy anchored on People, Technology and Service, the bank leverages robust Information and Communication Technology (ICT) infrastructure to provide cutting-edge solutions and products through its network of branches and electronic/digital channels to create value for its numerous clientele.

World Finance is a leading international magazine providing comprehensive coverage and analysis of the financial industry, international business and the global economy.

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