Rain of dividends as investors smile to the banks

By OKEY ONYENWEAKU

Investors are always looking for the best returns. In fact, they do not usually mind whether the times are bad or not. Rather their mind is set on what returns accrues to them at any point in time. And for those in Nigeria at the moment, the good times are evidently here; the dividends are pouring in.

Despite the headwinds caused by the Covid-19 pandemic, the fall-outs of Russias invasion of Ukraine; tighter monetary policies and inflationary pressures in the overall economy, several listed companies have made it possible for their teaming investors to smile to the banks.

BH checks reveal that despite the yet pervading season of gloom, the listed companies have in fact, made year 2021 a somewhat memorable one for their investors through ensuring that they tap from the rain of dividends.

Topping this chart are the banks whose results have been made public and who have already proposed to pay dividends to investors.

For instance, Zenith Bank, a tier 1 bank, paid a total dividend of N97.33billion to its teaming shareholders for the year ended 2021, representing 8.2 per cent higher than the N93billion paid as dividend in 2020. Zenith bank had paid an interim dividend of 30 kobo in half year 2021 and now a total dividend of 310kobo.

GT bank also paid N88.29 billion, representing 300kobo of 30kobo interim dividend and final dividend of 270 kobo.

For Access Bank, its shareholders will take home N24.88billion, representing a total dividend of 100kobo. Details show that the bank had paid interim dividend of 30kobo before the final dividend of 70 kobo.

On its part, UBA, the pan African bank paid a total dividend package of N27billion, representing 100kobo. It came in 20 kobo as interim and 80kobo as final dividend.

FBNH paid dividend of N14.238billion, representing 26kobo per share, while Union paid dividend of N7.313billion, representing 25kobo in year 2022.

Shareholders have confessed that they actually invested to reap good returns but they feared they may not get much given the turbulent operating environment occasioned by Russia/ Ukraine crisis.

The Nigerian economy has not been performing strongly and with no immediate indications to show that the trend would shift anytime soon.

Though the economy recorded a growth of 3.4 per cent in 2021, many believe the growth is still very fragile. Recent statistics revealed that the rate of unemployment, the second highest in the world is 33%; Underemployment rate stood at 22%; inflation is hitting the roof top at 16 per cent; while diaspora remittances are yet to regain their lost numbers.

Many have not forgotten that the operating environment in the last two years has been choking for almost all the businesses, including the banks.

Overall, the banks posted impressive results in an operating environment where the 2022 budget runs a deficit of N6.3trillion representing 37.29 per cent of total expenditure, while the country owes N41trillion debt. There is also added concern relating to the fact that the federal government spends about 90 per cent of its revenue to service debts.

The major revenue earner for the country, crude oil, which had moved from $104 pbd to $115 pbd as at April 22, 2022 still fluctuates.
Insecurity has not only hobbled agriculture, many parts of the Northern part of Nigeria have been taken over by bandits that not much business activities can subsist.

With the fearful scenario above, the economic trajectory of the country is still uncertain. This is because even the apex bank has warned that care must be taken to galvanize and push the economy out of slumber.

Zenith Bank

The shareholders of Zenith Bank Plc, Nigerias leading lender, have approved a proposed final dividend of N97.33 billion for the financial year ended December 31, 2021.

The banks shareholders gave their approval at the 31st annual general meeting (AGM) of the bank held on Wednesday in Lagos.

They expressed delight at the bumper final dividend payout of N2.80 per share which brings the total dividend for the 2021 financial year to N3.10 per share with a total value of N97.33 billion.

The chairman of Zenith Bank, Mr Jim Ovia, thanked the shareholders for their unflinching loyalty, which has enabled the bank to rise to the pinnacle of the nations financial services industry, and assured them of the banks commitment to consistently deliver superior value to them.

Speaking on the banks performance, the group managing director/chief executive, Mr Ebenezer Onyeagwu, said, If you look at the banks history over the years, Zenith Bank has always grown, and even within the pandemic, we have maintained a reasonable positive growth trajectory.

Growth is coming from the fact that we are deploying our digital capability to grow more businesses, simplify our service processes, make our processes more efficient, and deal with customers complaints.

He added that Apart from developing new products, we are discovering new business verticals, especially within the retail segment, which have significant revenue.

He also said that, Meeting the expectation of shareholders means we have to work harder. The team is dodged, hardworking, resilient, and above all, we have a very supportive board that comes with superior guidance.

On the dividend payout, the founder of the Independent Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, expressed the delight of shareholders over the consistent payment of dividends by Zenith Bank, noting that the banks shares remain the toast of investors because the bank has never failed to pay dividends to shareholders.

Also, the president of the Association of the Rights of Nigerian Shareholders (AARNS), Dr Faruk Umar, said, The bank is doing very well. All the ratios and indices have gone up. And more importantly, while we were in the meeting, I got my alert of the credit of my dividend. This is very commendable.

In spite of a challenging macroeconomic environment aggravated by the COVID-19 pandemic, the Zenith Bank Group achieved year-on-year (YoY) growth in gross earnings of 10 per cent from N696.5 billion reported in the previous year to N765.6 billion. This was on the back of a 23 per cent YoY growth in non-interest income from N251.7 billion to N309 billion and a two per cent YoY growth in interest income from N420.8 billion to N427.6 billion.

Profit before tax also grew by 10 per cent, from N255.9 billion to N280.4 billion in the current year. The increase was due to growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12 per cent from N121.1 billion in 2020 to N106.8 billion in the current year. This further led to a seven per cent increase in net interest income of N320.8 billion in 2021 from N299.7 billion in 2020.

Customer deposits increased by 21 per cent, 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 N1.87 trillion in 2021.

The groups continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1 per cent to 1.5 per cent in the current year. Although operating expenses grew by 13 per cent YoY, growth remains below the inflation rate, and the Group improved its Earnings per Share (EPS) which grew by six per cent from N7.34 to N7.78.

Total assets increased by 11 per cent, growing from N8.48 trillion in 2020 to N9.45 trillion in 2021, mainly driven by growth in customer deposits. With the steady recovery in economic activities, the Group prudently grew its gross loans by 20 per cent, from N2.9 trillion in 2020 to N3.5 trillion in 2021, with moderated NPL ratio from 4.29 per cent to 4.19 per cent YoY. The Group recorded impressive liquidity and capital adequacy ratios of 71.6 per cent and 21.0 per cent, which remained above regulatory thresholds of 30 per cent and 15 per cent, respectively.

GTCO

Shareholders of Guaranty Trust Holding Company (GTCO) Plc have unanimously endorsed the payment of a total dividend of N3 per share for the financial year ended December 31, 2021.

This endorsement was made at the holding company’s 1st Annual General Meeting (AGM) held in Lagos. The Group had proposed a final dividend of N2.70 per unit of ordinary share held by shareholders in addition to the interim dividend of 30 kobo interim dividend paid in June, bringing the total dividend for the 2021 financial year to N3.00 per unit of ordinary share.

Shareholders commended the board for the transition into a holding company and the financial performance achieved during the period under review despite the operating environment and also unanimously gave their approval the appointments of the new board membership.

Speaking on behalf of shareholders, the patron, Nigeria Shareholders Solidarity Association (NSSA), Timothy Adesiyan, appreciated the progress that the bank has made in its transition to a holding company.

He said that the shareholders have great expectations from the company and with the good corporate governance principle with which the company is run, the future is bright.

The chairman of the Progressive Shareholders Association of Nigeria, Boniface Okezie, commended the Board of GTCO for being proactive in becoming a holding company.

Speaking to shareholders, the chairman of GTCO, Mr. Hezekiah Adesola Oyinlola stated that 2021 was a pivotal year in our corporate history. After years of revisioning and planning, we successfully reorganized into a holding company to harness the potential within our operating environment and consolidate our position as a leading financial services provider in Africa.

He said the company’s progress in its drive to diversify its income streams and ensure long-term value creation for all stakeholders.

According to him, “it is a privilege to serve as the chairman of the Board of Guaranty Trust Holding Company and I am conscious of our business environment and the many challenges to our profitability. However, I have complete confidence in the ability of our leadership team to unlock new and exciting opportunities that will unleash the potential of our diversification for long-term growth and sustainable returns.

“When I look at the future-proofing of every part of our organisation; from our talent base to our business models and digital capabilities, I am reminded of just how forward-thinking our management team continues to be in our company’s constant push to be ahead of the curve in creating innovative financial solutions, delivering service excellence and ensuring long-term value creation.”

On the outlook of the company, Oyinlola said, “I am excited by the potential of our new holding company structure. I see the immense opportunities opened by our strategic investments in building up diverse lines of business. The future of financial services belongs to the institutions that will seamlessly integrate the full range of cutting-edge solutions in a people-centric digitally enabled ecosystem.”

The Group Chief Executive Officer (GCEO) of GTCO, Mr. Segun Agbaje said that the Company started 2021 with its corporate reorganisation and finished the year more robust and dynamic to consolidate its lead across the ever-extending breadth of financial services, saying that Following the shareholders approval of our transition to a holding company structure in December 2020, we worked with regulators, the broad spectrum of our stakeholders and some of the most experienced advisory institutions in the world, to ensure that we have, not only a smooth transition but also the best people and the right structures to drive our vision of becoming Africas leading financial services groups.

He added that in July 2021, we completed the incorporation of Guaranty Trust Holding Company as our new parent company.

Approved by shareholders as members of the GTCO board include, Mr. Hezekiah Oyinlola, Chairman; Mr. Segun Agbaje, GCEO; Mr. Suleiman Barau, Independent Non-Executive Director; Mrs Helen Lee Bouygues, Independent Non-Executive Director; Mrs. Catherine Echeozo, Non-Executive Director and Mr. Adebanji Adeniyi, Executive Director.

On the results, Agbaje said the 2021 results show resilient performance across all financial indices, reaffirming the Banks position as one of the best managed financial institutions in Africa.

The Group closed the year 2021 with total assets of N5.436 trillion, up by 9.9 percent from N4.945 trillion the full year 2020 position.
Across all its Banking Subsidiaries in West Africa, East Africa and the United Kingdom, the Group continues to maintain a diversified.

Balance Sheet.

The Group closed 2021 with a profit before tax of N221.5 billion, this is despite the challenges and headwinds presented by the operating and regulatory environments in 2021.

UBA

Amidst tail and headwinds, Africas Global Bank, United Bank for Africa (UBA) Plc, has assured shareholders and investors of its unwavering commitment to sustain its current growth trajectory even as its efforts at business diversification across Africa and beyond continues to yield increasing returns.

The Group Chairman, Tony Elumelu, who made this declaration at UBAs 60th Annual General Meeting, which was held at the Transcorp Hilton Hotel, Abuja on Thursday April 7, 2022, noted that the banks strategic investment decisions over the past few years have indeed translated to huge returns for its investors, despite the challenging business environment witnessed in the last two years.

“I am proud of how as a Group, we have been able to further consolidate on the new capabilities we have built, novel customer solutions we have deployed, efficiency gains recorded and the growth prospects we have leveraged from a recovering world, Elumelu stated, adding that these were the building blocks for the very strong financial performance and the growth delivered by your Group in 2021, further confirming the wisdom of the investments we made and the strategy we have pursued, to ensure the diversification and sustainability of our business model.”

Whilst expressing his delight to shareholders and customers who have stood with UBA for almost eight decades, Elumelu remained confident of the banks capacity to sustain this momentum especially as economic activities recover from the impact of the Covid -19 pandemic.

“Our goal is to continue to build strong brand loyalty with our customers and create additional value for our shareholders, whose underlying support has positioned UBA for continued growth,” the Chairman noted.

UBA’s Group Managing Director/Chief Executive Officer, Kennedy Uzoka, who went into details about the improved performance of the banks subsidiaries in the financial year under consideration, said, “we are happy that the global community recognises the role our Group is playing in the transformation of the African economic landscape through innovative and customer focused banking services.”

He pointed out that the banks business in the United Kingdom had specifically witnessed remarkable expansion, adding as from July 2021, UBA UK started making profit, and even to date, they are still doing well, and the same can be said for many of our African subsidiaries.

“The truth is that we are driven by the opportunities and potential in each of the geographies that we invested in, and we are happy with what we have achieved so far.”

Shareholders who spoke at the meeting including Sir Sunny Nwosu, Alhaji Farouk Umar, Mr. Nonah Awoh, Mr. Patrick Ajuda, Mrs. Bisi Bakare and Chief Timothy Adesiyan, were unanimous in their commendation of the board and management of UBA, for the impressive financials which have translated to higher dividends for shareholders.

“Despite the economic situation, UBA has been able to grow profitability and increase its customer base. If you compare the dividend with the share price of UBA, you will see that our dividend yield is very high. No bank in Nigeria has been able to achieve this, and I therefore commend the UBA board,” Umar noted in his remarks.

At the end of the 2021 financial year, UBAs Profit Before Tax was impressive with a 20.3 percent growth to N153.1 billion, compared to N127.3 billion at the end of the 2020 financial year; while Profit After Tax rose grew by 8.7 percent to N118.7 billion in 2021, compared to N109.2 billion recorded the previous year. As a result, the Bank proposed a final dividend of 80 kobo for every ordinary share of 50 kobo for the financial year ended December 31, 2021, bringing the total dividend for the year to N1.00 as the Bank had earlier paid an interim dividend of 20 kobo.

United Bank for Africa Plc is Africas global bank, offering banking services to more than twenty seven million customers, across over 1,000 business offices and customer touch points in 20 African countries. With a presence in the United States of America, the United Kingdom and France and its more recent operating license in the United Arab Emirates, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.

Analysts are bullish on the bank which has shown vigour and promise.

One other significant thing about UBA is that it has long left its contemporaries behind and stands out as a leader.

The lender (Company) has remained formidable in the midst of all odds.
In fact, in the previous years its strong performances have also provided a sturdy base for the vigour and strength which the lender has displayed.

Access Bank

Nigeria’s biggest bank by assets, Access Bank Plc, has maintained its growth trajectory for the fourth consecutive year, recording 51.13% growth in profit to N160 billion for the full year 2021, ended December 31.

By this feat, the tier 1 lender has grown its profits by 167% in 4 years since hitting N60 billion in 2017.

The bank recorded gross earnings of N971.9 billion for the financial year ended December 31, 2021, representing an increase of 27 per cent over N764.7 billion posted in the financial year 2020.

According to its financial results released to the Nigerian Exchange Limited (NGX) on Friday, the lenders Profit Before Tax (PBT) for the period rose by 40 per cent Year on Year to N176.7billion from N125.9 billion in 2020, while Profit After Tax (PAT) grew by 51 per cent y/y to N160.2billion from N106.0 billion in 2020.

The assets base of the group remained strong and resilient with total assets of N11.7 trillion as at December 2021, representing a growth of 35 per cent y/y from N8.7 trillion in 2020 and more than twice the banks total assets in 2018.
Other performance indicators show that customer deposits stood at N7.0 trillion as at December 2021, a whopping 24.47% leap from N5.6trillion in 2020. Net Loans and Advances stood at N4.4 trillion as at December 2021 from N3.6 trillion in 2020. Non-Performing loans (NPL) ratio stood at 4.0 per cent as at December 2021 as against 4.3 per cent in 2020.

The bank, however, recorded a 64.66% depletion of net gain on financial instruments to N42.46 billion, on the back of a N136 billion loss on non-hedging derivatives.

But its e-banking income raked in N66.28 billion, representing a 18% spike from N56.09 billion in 2020 and suggesting an improvement in the banks utilization of the e-channels in the delivery of financial services to its customers.
The bank last traded at N10.40 per share, with a market capitalization of N369.67 billion and Year-to-date performance showing 11.83% share price appreciation as of Thursday, March 17, 2022.

In line with its policy of regularly extending the fortune to the shareholders, the board of directors has proposed a final dividend of N0.70 per share, to be paid on each of the 35,545,225,622 issued ordinary shares, bringing the total dividend for the financial year to N1.00 kobo, having paid an interim dividend of N0.30 kobo in September 2021.

“Our diversified business model yielded positive sustainable results, guided by a robust risk management framework, as we grew the business cautiously and recorded sound prudential ratios. This years results reinforce our resolve to generate sustainable returns despite challenging market conditions,” said Herbert Wigwe, Chief Executive Officer, Access Bank Plc.

“We sustained robust capital and liquidity positions, well above regulatory levels with a Basel II Capital Adequacy Ratio of 24.5 per cent and a Liquidity Ratio of 51.0 per cent . This positions the Bank to support our customers across various markets and adequately execute our expansion strategy.

“To actualize our vision of becoming the worlds most respected African Bank and Africas Payment Gateway, we have taken strategic strides to create indelible footprints across the African continent.

“These include our most recent additions in South Africa, Botswana, and Guinea We also strengthened our business in Mozambique and Zambia, with noticeable improvement in rankings and market share.”

Strategic growth.

With its successful merger with Diamond Bank in 2019, Access Bank made a bold statement of intent to dominate the Nigerian banking space. It was a transaction that instantly shot it up as the biggest bank in the country, with assets base of N7.28 trillion, and customer base of 31 million.

However, an appreciation of N1.537 trillion or 21.6 per cent within one year ramped up the assets value of the lender to N8.680 trillion.

Access Bank was a small commercial bank, ranked 65th in size out of 89 banks in the country when Wigwe and his business partner, Aigboje Aig-Imoukhuede, acquired it in 2002. It was scaled up through a series of strategic mergers and acquisitions to build capacity and market strength over the years.

Wigwe took over from Aig-Imoukhuede as the banks MD/CEO in 2014 and has been driving its expansion, both in terms of footprint and product diversification.

The group is relying on its digital capability and innovative payments solutions to take the business to the next level as part of its expansion strategy.

“By 2023, Access Bank will have consolidated its position as Africas gateway to the world with about 100 million customers in Nigeria and additional 20m customers across our African subsidiaries,” Wigwe said last year.

But the payment of dividends is not everything. To be sure, almost every business management team becomes jittery during times of economic crisis as we are now in. This is because at such periods, business dynamics generally change and throw up stifling challenges to the existing organisations.

Though the strong and focused survive the waves, but in the final analysis they record reduced profit and earnings margins.

But even beyond these, there is a consensus that the economy is hardly favourable to positively nurture any business venture strongly. Many do not see the economic fundamentals changing over-night. And that indeed is where the rubber meets the road.