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Onyeagwu grows Zenith Bank’s total assets by 186% in 3 years

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Zenith Bank: Onyeagwu to take a bow after minting cash for shareholders

Group Managing Director of Zenith Bank, Ebenezer Onyeagwu, and his team have grown the bank’s total assets by almost 186 percent to N18.160 trillion.

The team led by Onyeagwu achieved this growth in three years from 2019 when he assumed office as GMD of Zenith Bank to the end of the year 2022.

Details show that despite the macroeconomic challenges in the economy,
the bank was able to grow its total assets from N6.346 trillion in 2019 to N18.160 trillion in 2022.

Within the same period, the bank’s Gross Earnings jumped 80.5 percent from N243.2 billion in 2019 to N439.2 billion in 2022.
Similarly, in the nine months’ performance of the bank, both interest income and non-interest income aided her in achieving three-digit growth in the top-line measurement indicators of Zenith Bank Plc for the third quarter ended September 2023.

The Q3 results showed the financial group recorded a 149 percent increase in profit before tax, from N202.5bn in Q3, 2022 to N505bn in Q3, 2023.

Profit after tax also grew by 149 percent from N174.3bn to N434.2bn within the same period.

The lender defied the challenging macroeconomic environment to grow its interest income by 72 percent to N670.9bn from N390.8bn in Q3, 2022, while non-interest income grew by 186 percent from N212bn to N607.2bn.

“Interest income increased because of the growth in risk assets as well as the effective pricing thereon,” the group said.

“The non-interest income growth is largely driven by the revaluation gain due to the unification of exchange rates during the year. The cost-to-income ratio reduced from 55.8 percent in Q3 2022 to 37.8 percent in the current period.

“Impairment levels increased due to the deliberate incremental provisions necessitated by the conservative approach towards the heightened risk environment and the creation of a counter-cyclical buffer needed to deal with any impending volatility of exchange rates. This caused the cost of risk to deteriorate from 1.3 percent in Q3 2022 to 5.5 percent in Q3 2023, however, this is an improvement from Q2 2023 where the cost of risk printed at 8.8 percent because of prudent management of risk assets.”

As many businesses struggle to survive, in the first nine months of 2023, Zenith Bank’s total assets grew by 48 percent to N18.2tn from N12.3tn as of December 2022.

Customers’ deposits grew by 49 percent from N8.98tn in December 2022 to N13.38tn in September 2023. The growth in customers’ deposits cuts across both corporate and retail segments with the savings portfolio (all currencies) growing from N2.7tn in December 2022 to N4.6tn in September 2023.

Gross loans increased by 48 percent from N4.1tn in December 2022 to N6.1tn in September 2023 due to the revaluation of foreign currency-denominated loans as well as the growth in local currency loans to strategic and thriving sectors of the economy.

The bank’s non-performing loan ratio improved to 3.8 percent in the period ended 30 September 2023. This is well below the prudential limit of 5.0. Zenith Bank’s Net interest margin closed at 5.6 percent from 6.2 percent reported in September 2022 due to low yield in government securities.

Analysts have fingered several strong points about the bank. They note that it is the only bank in the financial industry that has continued to grow organically despite the induced mergers and acquisitions by an industry-wide and Central Bank of Nigeria-sponsored Consolidation program in 2005.

This means that the bank has continued to maintain a consistent and undiluted corporate culture since its founding. With a vision to play in the big league, Zenith Bank’s management had decided to grow its capital when most of its contemporaries lacked the capacity. The bank had gone public before the 2005 banking consolidation policy of the CBN which was visionary and put it ahead of competition.

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The Vice Chairman of Highcap Securities Limited, Mr. David Adonri reckons that Onyeagwu appears to be one the best in the banking industry given his achievement in the last three years as GMD of Zenith Bank.

‘’Under him, Zenith Bank has been performing very well which also extends to his success in building the bank. All the fundamental indicators of the bank have been very positive under his management. To that extent, he has met the expectations of both the depositors and the investors in the bank.

‘’Onyeagwu is in fact, one of the best in the industry given the fundamentals of Zenith Bank as of today. All those managing the tier one banks have performed very well given their third-quarter results’’, said Adonri

From that vantage point, the bank has maintained not only a steady growth but also a leadership position in the industry over the years.

Among the few top performers, what distinguishes Zenith Bank is not just the mega-size balance sheets but the high degree of innovation and quality of ideas that form the bedrock of operations.

While its dividend package may look moderate but is being insinuated that no other bank has paid higher than Zenith Bank in the banking industry. Not even its greatest rival, GT Bank.

The analysis showed that the bank’s dividend yield in 2011 was 6.83 percent of its share price, while it was 8.1 percent in 13. Going further, it stood at 9.51 percent in 2014, 14.23 percent in 2015, 12.20 percent in 2016, 7.88 percent in 2017, 11.93 percent in 2018, 16.72 percent in 2019, 15.4 percent in 2020, 12.5 percent in 2021 and 13.3per cent in 2022
Indeed, analysts wager that Onyeagwu’s scorecard leaves no one in doubt about where he is taking the lender in the next few years.

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